What to know:
- SEC proposal could ease key barriers for tokenized equities trading on blockchains.
- Benchmark says Rule 611 rollback may support AMM-based tokenized equities trading.
- Securitize, Coinbase, and Galaxy were named as potential beneficiaries of the plan.
A proposed SEC rollback could shift the regulatory path for tokenized equities in the United States. Benchmark Equity Research said the June 11 plan may affect crypto market structure. It linked the proposal to trading, lending, and settlement on blockchains.
The Securities and Exchange Commission has proposed eliminating Rule 611 and Rule 610(e) of Regulation NMS. The rules have been in effect since 2005 for U.S. equities routing and execution. The move would streamline the market framework, reduce costs, and enable competition to drive future equity market design, the agency said.
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Rule 611 Rescission Supports DeFi Trading
Benchmark stated that the move was the most significant regulatory development in crypto this year. The rescission may lift a key legal hurdle for tokenized equities, said analyst Mark Palmer. That barrier has prevented tokenized stocks from being traded via automated market makers on public networks, he said.
The Order Protection Rule, Rule 611, restricts trading at prices inferior to the protected quote on another exchange. It attaches trading centers to the national best bid and offer at the time of the trade. Rule 610(e) also prevents locked/crossed markets, where displayed quotes overlap, which interferes with price priority.
Palmer stated that these provisions are very limited in the decentralized finance-based trading models. In AMMs, the price is continuously updated via price curves rather than order books. They also do not use intermarket price protection measures like the NBBO.
Benchmark suggested that tokenized equities platforms could be early winners if the SEC eliminates the trade-through framework. Crypto equity exchanges can then become closely related to the prevailing market infrastructure, the note said.
That change would help enable blockchain-based trading, lending, and settlement without mandating that all transactions go through traditional routing.
Securitize Leads Tokenized Equities Beneficiary List
Securitize was named as the most direct potential beneficiary in Benchmark’s note. The firm said it is a regulated tokenization platform and an issuer infrastructure provider for tokenized securities. It also referenced Securitize’s participation in the BUIDL initiative by BlackRock.
Coinbase Global and Galaxy Digital were also cited by Benchmark as potential beneficiaries. It referenced Coinbase’s exchange and brokerage platform and Galaxy’s digital asset market-making business. These positions may gain increased significance if tokenized shares are given a better market structure definition.
Nevertheless, Benchmark said the SEC proposal is not a solution to all the problems. The issues are still unresolved with regard to exchange registration, rules of the alternative trading system, custody, clearing, and settlement for P2P or DeFi-native trading. The note said the crypto industry is waiting for a possible innovation exemption to address those areas.
The SEC has opened a 60-day public comment period on the rescission proposal. Benchmark expects a vote on the rule removal in early 2027. Until then, the proposal remains a regulatory opening rather than a final framework for tokenized equities.
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