AI · The Block
Benchmark confirms SEC’s NMS proposal is the ‘most consequential’ US crypto rule this year
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Benchmark Equity Research said the Securities and Exchange Commission’s June 11 proposal to rescind two decades-old market structure rules is "the most consequential piece of regulation to impact the U.S. crypto space" this year, arguing it would remove a key constraint on tokenized equities trading, lending and settlement on public blockchains.
Key facts
- The agency last week proposed scrapping Rule 611 and Rule 610(e) of Regulation NMS, the trade-through framework that has governed routing and execution for every U.S. equity since 2005
- According to the note, Rule 611, known as the Order Protection Rule, requires trading centers to avoid executing trades at prices inferior to protected quotations displayed on other venues
- Benchmark also pointed to Coinbase Global and Galaxy Digital as additional beneficiaries, citing their respective roles in trading infrastructure, brokerage services, and digital asset market-making
- In a note to investors on Monday, Benchmark analyst Mark Palmer said the rescission would remove the primary legal obstacle that has kept tokenized stocks from trading on automated market makers
Summary
The agency last week proposed scrapping Rule 611 and Rule 610(e) of Regulation NMS, the trade-through framework that has governed routing and execution for every U.S. equity since 2005. In a note to investors on Monday, Benchmark analyst Mark Palmer said the rescission would remove the primary legal obstacle that has kept tokenized stocks from trading on automated market makers. According to the note, Rule 611, known as the Order Protection Rule, requires trading centers to avoid executing trades at prices inferior to protected quotations displayed on other venues, effectively enforcing compliance with the national best bid and offer at the moment of execution.