The greatest policy uncertainty is dissipating, but compliance costs and technical implementation capabilities will become the new dividing lines.

The SEC officially proposes to abolish the 20-year core rules, and the biggest obstacle to tokenized US stocks is disappearing!

One of the most significant regulatory news on June 12, 2026. The U.S. Securities and Exchange Commission (SEC) officially proposes to eliminate two core rules in the Regulation NMS—Rule 611 (Trade Through Rule) and Rule 610(e) (Locking/Cross Market Restrictions).
This is considered the systematic removal of the largest structural barrier to trading tokenized US stocks in the DeFi space.

1. Why are these two rules the “biggest obstacles”?

To understand the significance of this change, it’s necessary to first grasp how these rules have hindered the development of tokenized stocks:

Rule 611 (Trade Through Rule):
Requires all trading centers to reference and follow the “National Best Bid and Offer” (NBBO) when executing trades, and prohibits trading at prices worse than protected quotes displayed by other exchanges.
However, in DeFi, automated market makers (AMMs) execute trades based on pool prices and slippage mechanisms, unable to route cross-market orders or pause trading due to better quotes on other exchanges. Any liquidity pool for tokenized US stocks will continuously violate this rule.

Rule 610(e) (Locking/Cross Market Restrictions):
Requires trading platforms and the National Securities Clearing Corporation to establish rules to prevent members from improperly displaying locked or crossed quotes, maintaining market order and price protection.

Simply put,
These two rules originated in 2005 and were designed for the “static quote” system of traditional centralized exchanges.
DeFi AMMs, on the other hand, adopt a “dynamic pricing” mechanism, fundamentally conflicting with the underlying logic of these rules.
As pointed out in the written testimony submitted by Kimmey Labs and Plume to the SEC in March 2026: Rule 611 “protects fixed static quotes that are incompatible with the liquidity of dynamic automated market makers.”

2. Why is the SEC acting now?
This proposal is not an isolated move but a key part of a series of regulatory reforms by the SEC in 2026:

Establishment of regulatory coordination mechanisms:
On March 11, 2026, the SEC and CFTC signed a Memorandum of Understanding on coordinating regulatory interests, officially launching the “Joint Project Crypto,” ending decades-long turf wars between the two agencies.
On March 17, the SEC issued a milestone document, systematically outlining five categories of classification for crypto assets.

Shift from “enforcement-led” to “rule-based” regulation:
SEC Chair Gensler explicitly stated that existing rules over the past twenty years have failed to improve market efficiency and have instead increased trading costs and limited market structure evolution.
This proposal aims to simplify market structure, reduce costs, and allow competition and innovation to shape the future of the U.S. stock market.

Systematic advancement of supporting reforms:
Just a few days ago (June 9, 2026), the SEC also proposed a major “shelf registration” reform, planning to significantly lower issuance thresholds and relax Form S-3 access conditions.
This completes the “issuance-trading” policy chain with the abolition of rules for tokenized stocks.

3. What will happen after abolition? — Opportunities and challenges coexist

Opportunities:

DeFi AMMs gain entry tickets
With the rule abolished, the new principle will be “best execution obligation”—a broker-centric framework that can accommodate AMM models.
This means platforms like Uniswap could directly trade tokenized US stocks.

Structural upgrade of traditional markets
Nasdaq and NYSE have already taken the lead.
In March 2026, the SEC approved Nasdaq’s rule modifications to allow securities to be traded in tokenized form; earlier this month, the NYSE’s similar proposal was also approved.
Tokenized stocks and traditional stocks will share the same CUSIP, trade on the same order book, enjoy the same execution priority, and settle T+1 via DTC.

Institutional capital entry channels open
According to data from State Street, tokenized real-world assets currently account for about 2% of the average investment portfolio of financial institutions, expected to reach 5% within three years.

Challenges still to face:

Tokenized stocks remain securities
The SEC’s January 2026 “Tokenized Securities Statement” clearly emphasizes that tokenization does not change the legal classification of assets, and all requirements under securities law—registration, disclosure, anti-fraud—still apply.

Practical thresholds for clearing, settlement, and trading venue registration remain
Research leaders point out that this is only the first step in the SEC’s “crypto project” action plan—initially removing the most difficult market structure barriers through rule abolition, followed by addressing trading venue registration issues via “innovation exemptions.”

Timeline
The public consultation period for this proposal is 60 days, and the SEC is expected to finalize the rules in the first quarter of 2027. The final rules may still be amended.

4. Outlook
This marks a systemic restructuring from “whether to allow tokenization” to “how to define on-chain market orderliness.”

The core signal from the SEC’s move is:
A clear compliance pathway is being outlined: no longer through enforcement to “draw red lines,” but proactively updating outdated rules that no longer fit technological development.

The integration of traditional finance and decentralized finance enters an operational phase:
No longer “substitution” or “disruption,” but a “two-way journey.” On-chain settlement by traditional exchanges and compliant access to DeFi are progressing simultaneously.

A trillion-dollar market for tokenized assets is opening:
Boston Consulting Group estimates that by the 2030s, the global market cap of tokenized securities will reach at least $16 trillion.

For practitioners:
The greatest policy uncertainty is dissipating, but compliance costs and technological implementation will become new dividing lines.
The next 12-18 months will be critical for observing which projects can truly turn regulatory benefits into actual products and liquidity.

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