STOCKS | Galaxy Digital’s Alex Thorn Says SEC Proposal to Repeal Reg NMS Rules Could Affect Tokenized Stocks

Galaxy Digital research head Alex Thorn said the U.S. Securities and Exchange Commission (SEC) has proposed repealing parts of Regulation NMS, including Rule 611 (the order protection rule) and Rule 610(e) (restrictions on locked and crossed markets). According to PANews, Thorn said Rule 611 has been a core element of U.S. equity market structure since 2005 and requires trading venues to prevent executions at prices worse than protected quotes displayed on other exchanges. Thorn added that Rule 611 is one of the biggest obstacles to trading tokenized stocks in DeFi. He said automated market makers cannot comply with the rule, and any liquidity pool for tokenized stocks would continuously violate it, effectively making it an illegal trading venue.