SEC plan to scrap ‘Rule 611’ a boon for tokenized US stocks: Galaxy

The U.S. Securities and Exchange Commission (SEC) proposed to eliminate Rule 611 of Regulation NMS on March 13, 2024, a move that Galaxy Digital believes will significantly benefit the tokenization of U.S. stocks. Alex Thorn, Head of Research at Galaxy, stated in a report published this week that Rule 611, which mandates that brokers execute trades at the best available price across different exchanges, acts as a substantial impediment to the widespread adoption of tokenized securities on decentralized trading platforms. The rule's complexity and the technical challenges in ensuring compliance within a blockchain environment have historically discouraged innovation in this area. By removing this rule, the SEC aims to modernize market structure and reduce regulatory burdens, which Thorn suggests will pave the way for more efficient and accessible trading of tokenized U.S. equities. This regulatory shift could foster greater liquidity and interoperability for digital asset markets, potentially attracting more institutional investment into tokenized financial products. The SEC's proposal is currently open for public comment, with a deadline of May 28, 2024, indicating a deliberate process for market participants to voice their opinions on the proposed changes.