SEC Proposal Could Remove Major Barrier for Tokenized U.S. Stocks

The U.S. Securities and Exchange Commission has proposed removing two important rules under Regulation National Market System (NMS), a move that could significantly accelerate the growth of tokenized U.S. stocks and decentralized finance markets.

The proposal would eliminate Rule 611 and Rule 610(e), regulations introduced in 2005 to govern stock trading across exchanges. SEC Chairman Paul Atkins said the changes are intended to simplify market structure, reduce costs, and encourage greater innovation and competition in U.S. equity markets.

Tokenized Stocks Could Gain Momentum

According to Alex Thorn, Head of Research at Galaxy Digital, Rule 611 has been one of the biggest obstacles preventing automated market makers (AMMs) from supporting tokenized U.S. equities at scale. AMMs execute trades through liquidity pools and cannot easily comply with requirements tied to traditional exchange pricing systems.

Rule 610(e), which restricts locked or crossed quotations, has also created challenges for decentralized trading models.

Analysts Expect Progress by 2027

Jaret Seiberg of TD Cowen said the proposal is likely to be approved, with final adoption expected in the first quarter of 2027. He added that the SEC may grant exemptions sooner, allowing tokenized stock pilot programs to move forward while broader regulatory reforms continue.