The SEC just proposed rescinding Reg NMS Rule 611, quietly removing the biggest regulatory moat protecting Wall Street's legacy broker monopoly.
This is a massive victory for DeFi.
Since 2005, Rule 611 (the Order Protection Rule) forced all trades to execute at the National Best Bid and Offer (NBBO) on centralized order books.
This essentially made trading tokenized US stocks via on-chain Automated Market Makers (AMMs) non-compliant. AMMs price assets along liquidity curves, not through centralized matching engines. Because they couldn't guarantee NBBO compliance the way the legacy system demanded, trading tokenized Apple or Nvidia on a decentralized exchange remained a regulatory non-starter.
Scrapping Rule 611 and the related Rule 610(e) changes the core requirement.
Instead of forcing routing to centralized matching engines, the proposal shifts the burden to a broker's general "best execution" obligation. This opens a massive regulatory loophole and creates a legal corridor for tokenized equities to trade natively on-chain.
Legacy brokers have used Rule 611 to protect their matching engines and fee structures for almost two decades. Removing it means we are heading toward a market where you can trade tokenized Tesla, Apple, or Nvidia directly on-chain without any legacy middlemen.
As a builder and crypto lover, I spend a lot of my time looking at the practical mechanics of on-chain liquidity. The technology has been ready to handle real-world assets for a while, but the rules were built for a different era.
This proposal finally gives the infrastructure the breathing room it needs to compete.