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Benchmark: SEC’s NMS Reform May Be This Year’s Most Critical Variable in Crypto Regulation
Svmuu News: Research firm Benchmark Equity Research notes that the market structure reform proposal put forward by the U.S. Securities and Exchange Commission (SEC) on June 11 may be one of the most far-reaching regulatory measures affecting the U.S. crypto industry this year.The proposal seeks to repeal Rule 611 and Rule 610(e) of Regulation NMS, two core rules that have governed the routing and execution of U.S. stock trades since 2005 and are believed to have long restricted the development of tokenized stocks and on-chain trading. Rule 611 (the Order Protection Rule) requires trading venues to avoid executing trades at prices lower than “protected quotes” on other markets, thereby enforcing the National Best Bid and Offer (NBBO) system; Rule 610(e) prohibits price-locking and cross-market structures, restricting quote overlap and price mismatches. Benchmark analyst Mark Palmer stated that if the rules are repealed, it would remove key legal barriers hindering DeFi trading models such as automated market makers (AMMs), allowing them to operate without relying on traditional order routing systems.The rule changes would directly benefit the trading infrastructure for tokenized stocks and crypto securities, with Securitize identified as the most direct beneficiary. Additionally,Coinbase, and Galaxy Digital could benefit from the expansion of their trading, custody, and market-making operations. However, Benchmark also notes that even with these rule relaxations, key issues such as exchange registration, clearing and settlement, and custody frameworks remain unresolved, and the market continues to anticipate the SEC’s potential introduction of an “innovation exemption” mechanism.The SEC has now opened a 60-day public comment period, and Benchmark anticipates that the final vote may take place in early 2027. (The Block)
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