Key facts
- Benchmark Equity Research called the SEC's proposal to rescind Regulation NMS rules the most consequential US crypto regulation of the year.
- The proposal aims to remove trade-through rules (Rule 611 and Rule 610(e)) that have governed US equity trading since 2005.
- This change could enable tokenized equities to trade on public blockchains and decentralized finance platforms.
- Securitize, Coinbase, and Galaxy Digital are identified as potential beneficiaries.
- Remaining questions include exchange registration, custody, and settlement frameworks for DeFi-native trading.
Benchmark Equity Research has identified the U.S. Securities and Exchange Commission's (SEC) June 11 proposal to rescind two market structure rules, Rule 611 and Rule 610(e) of Regulation NMS, as the most significant piece of crypto regulation for the year. These rules, in place since 2005, govern trade routing and execution for U.S. equities. Benchmark argues that their removal would eliminate a primary legal barrier preventing tokenized equities from trading on public blockchains and decentralized finance (DeFi) platforms, particularly automated market makers.
Analyst Mark Palmer noted that the rescission would allow venues like tokenized equity exchanges to operate more closely with existing equity market infrastructure. Securitize, a regulated tokenization platform, was highlighted as a direct beneficiary, alongside Coinbase Global and Galaxy Digital, due to their roles in trading infrastructure and digital asset market-making.
However, Benchmark also pointed out that several critical questions remain unanswered, including the frameworks for exchange and alternative trading system registration, custody, clearance, and settlement for peer-to-peer or DeFi-native trading. The crypto industry is reportedly relying on a forthcoming innovation exemption to address these issues. The SEC has opened a 60-day public comment period on the proposal, with Benchmark anticipating a vote on the rescission in early 2027.