SEC Proposes Rescinding Order-Protection Rule (Rule 611) and Locked/Crossed-Quote Ban

The Securities and Exchange Commission on Thursday proposed rescinding two cornerstone provisions of Regulation NMS, reopening a foundational part of the framework that governs how U.S. stock orders are routed and how quotes are protected across markets.

In a June 11 announcement, the SEC said it is proposing to rescind Rule 611, known as the order-protection or trade-through rule, and Rule 610(e), which prohibits locked and crossed quotations. The proposal would also remove related defined terms in Rule 600 and make conforming changes to other provisions. The agency said the public comment period will remain open for 60 days after the proposing release is published in the Federal Register.

The move is a proposal, not a final rule. But it targets two core parts of Regulation NMS, the SEC’s main market-structure framework for U.S. equities. SEC Chairman Paul S. Atkins said the agency is revisiting rules that have shaped trading for about two decades.

“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,” Atkins said.

He added: “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.”

Rule 611 was adopted in 2005 as part of Regulation NMS, a broad SEC overhaul of the national market system. The rule requires trading centers to maintain policies designed to prevent executions at prices worse than protected quotations displayed by other trading centers. In practice, it helped build the modern system around protecting the best displayed quote across competing venues.

Rule 610(e), also adopted in 2005, addresses locked and crossed markets. Those terms refer to situations in which quotes on different venues match each other exactly or overlap in a way that can disrupt normal price display and trading. The SEC said Thursday it is proposing to rescind that provision as well.

The agency’s materials make clear the proposal is narrower than a full rewrite of Rule 610. It does not rescind Rule 610(c), the separate access-fee provision. Along with the proposed removal of Rules 611 and 610(e), the SEC said it would eliminate related definitions in Rule 600 and make technical conforming revisions elsewhere in Regulation NMS.

Thursday’s proposal fits into a broader SEC review of equity-market structure, though the agency framed this action specifically around Rule 611 and related provisions. According to the SEC, the proposal follows prior work that included public roundtables in 2025 on Rule 611 and other Regulation NMS issues. The commission also released supporting materials Thursday, including a fact sheet and Atkins’ statement from the open meeting.

The proposal does not itself change trading rules immediately. Any changes would come only after the SEC reviews comments and decides whether to adopt a final rule. For now, the next step is the comment process: The agency said the public will have 60 days to respond after the proposal is published in the Federal Register.