On 11 June 2026, the United States Securities and Exchange Commission proposed amendments to rescind Rules 611 and 610(e) of Regulation NMS, marking a potential shift in the regulation of United States equity markets. The proposal would remove the trade through prohibition and restrictions on locked and crossed quotations for National Market System stocks. The US SEC stated that advances in market technology, automation, connectivity and order routing have reduced the need for these provisions. The proposal forms part of a broader review of market structure and seeks to reduce compliance burdens, simplify trading frameworks and allow competition and market forces to shape the future development of United States equity markets. Public comments will be accepted for 60 days following publication in the Federal Register.
SEC Reviews Two Cornerstones of Regulation NMS
The proposal would rescind Rule 611 of Regulation NMS, commonly known as the Trade Through Rule, and Rule 610(e), which restricts locking and crossing quotations in National Market System stocks. The SEC also proposes to remove related definitions contained in Rule 600 and make corresponding amendments across other regulatory provisions.
Rule 611 was adopted in 2005 to prevent trades from being executed at prices inferior to protected quotations displayed by other trading venues. Rule 610(e) was introduced to prevent market participants from displaying quotations that lock or cross protected quotations. Together, these provisions became central features of the modern United States equity market framework.
SEC Chairman Paul Atkins Calls for Market Structure Simplification
Announcing the proposal, US SEC Chairman Paul S. Atkins stated: “After two decades of Rule 611, it is high time that the Commission review its unintended consequences that have hindered rather than enhanced the long term growth of our markets. This proposal is intended to simplify market structure and reduce costs for market participants while allowing competition, innovation, and other market forces to shape the continuing evolution of our equity markets. I look forward to reviewing public comments as we take a careful, deliberative approach to avoid repeating the same mistakes that brought us here.”
Why the SEC Proposes Removing Rule 611
According to the proposing release, the US SEC believes United States equity markets have evolved substantially since Regulation NMS was adopted in 2005. The US SEC noted that markets are now highly automated, interconnected and technologically advanced. The US SEC also observed that trading activity has become increasingly fragmented and that a growing proportion of transactions occur through non displayed liquidity venues and off exchange trading platforms.
The US SEC stated that Rule 611 has contributed to increased market complexity, higher compliance costs, restrictions on order handling flexibility and the proliferation of trading venues. The proposing release further notes that technological developments and enhanced connectivity have reduced the original justification for mandatory trade through protections.
Proposed Removal of Locked and Crossed Market Restrictions
The US SEC also proposes to eliminate Rule 610(e), which requires exchanges and national securities associations to maintain rules designed to avoid locked and crossed markets. A locked market occurs when the best bid equals the best offer, while a crossed market occurs when the best bid exceeds the best offer.
The US SEC stated that improvements in automation, market access and data availability have reduced the necessity for these restrictions. The proposal suggests that removing the provision could improve competition, simplify compliance obligations and allow market participants greater flexibility in determining execution strategies.
Impact on United States Equity Market Structure
The proposing release describes Rule 611 as the most significant and controversial element of Regulation NMS. The US SEC notes that numerous market participants have argued that the rule contributed to exchange proliferation, increased connectivity costs and greater market fragmentation. Other stakeholders have linked the rule to the growth of complex order types and limitations on institutional trading strategies.
The Commission acknowledged that changes to these provisions could have wider implications for best execution obligations, market data revenue allocation frameworks, self regulatory organisation rules and National Market System plans. For this reason, the US SEC has requested extensive public feedback on potential market structure consequences arising from the proposal.
Next Steps
The SEC’s proposal has entered the public consultation stage. Comments must be received on or before 17 August 2026. Following review of stakeholder feedback, the US SEC will determine whether to proceed with the proposed rescissions and related amendments. If adopted, the amendments would represent one of the most consequential changes to United States equity market regulation since the original adoption of Regulation NMS in 2005.
