Ondo Finance Urges SEC to Rescind Regulation NMS Rule 611, Proposes Three Safeguards for Tokenized Stock Trading
Key Takeaways
- •Ondo Finance supports the SEC's proposal to rescind Rule 611 of Regulation NMS, which has mandated routing orders to venues displaying the best price since 2005.
- •Decentralized exchanges cannot technically comply with Rule 611 because they are unable to ingest Securities Information Processor data or execute intermarket sweep orders.
- •Tokenized stocks are currently valued at over $1 billion according to RWA.xyz data, underscoring the market significance of the regulatory decision.
- •Ondo Finance has requested three specific safeguards from the SEC: on-chain execution standards, permission for RFQ-based pricing of tokenized orders, and clarification that operating neutral execution infrastructure does not require new registration.
- •The SEC has until August 2026 to complete the required 60-day public comment period, with the final ruling expected to significantly reshape how tokenized and traditional securities coexist in U.S. markets.
Ondo Finance has submitted a comment letter to the U.S. Securities and Exchange Commission (SEC) supporting the proposed rescission of Rule 611 of Regulation NMS (National Market System), the trade-through rule that has governed U.S. stock execution since 2005. Rule 611 requires that orders be routed to whichever venue displays the best price—a framework Ondo argues was designed for centralized exchanges operating with one-way trading.
The real-world asset (RWA) issuer contends that the rule is incompatible with decentralized infrastructure. According to Galaxy Research, a decentralized exchange (DEX) cannot ingest Securities Information Processor (SIP) data—the consolidated feed that aggregates best bid and offer quotes across all U.S. exchanges—or execute intermarket sweep orders, meaning any tokenized NMS stock pool attempting to comply with Rule 611 will structurally fail.
This week, Ondo submitted a comment letter to the SEC on its proposal to rescind Rule 611 of Regulation NMS, the rule governing how every U.S. stock trade has executed since 2005. Rule 611 routes orders to whichever venue shows the best price, built for a market with one… pic.twitter.com/kV9PWkEvPm — Ondo Finance (@Ondo) August 12, 2026
For proponents of Ondo Stock, as well as alternative trading systems (ATS) and other market makers, the regulatory changes under consideration may determine whether tokenized stock offerings from platforms such as Robinhood, Kraken, and Coinbase can compete directly with traditional order books and route orders on their own. The outcome is being closely watched across both the digital assets industry and traditional equities sector, as it could remove one of the primary structural barriers preventing on-chain venues from offering compliant stock trading alongside conventional brokerages.
Market Context and Timeline
According to data from RWA.xyz, tokenized stocks are currently valued at over $1 billion. The SEC has until August 2026 to complete the required 60-day public comment period.
If the proposed changes are adopted, dealers and exchanges will need to revise their order-routing procedures, surveillance mechanisms, and best-execution policies. The outcome will shape how traditional securities and tokenized assets interact within the broader market.
SEC Modernization Beyond Rule 611 Repeal
While Ondo Finance supports the removal of Rule 611, the company stated in its comment letter that rescission alone will not fully enable interoperability between tokenized and traditional markets. The firm has called on the SEC to take broader steps to modernize equity market structure.
The SEC's April 1, 2024 proposal would eliminate both Rule 611 and Rule 610(e), removing the requirement to route orders to venues displaying the best-protected quote—a mandate that was originally drafted and adopted by the Commission.
Three Safeguards Requested
Ondo Finance, which operates a platform for tokenized U.S. stock entitlements issued via the Depository Trust Company (DTC) through broker-dealer Ethereum Alpaca and custodian BitGo, has requested three specific safety measures from the Commission:
- Execution standards must apply on-chain as well as off-chain.
- Tokenized orders should be permitted to compete through request-for-quote (RFQ) pricing—an approach already widely used in fixed-income and over-the-counter markets where centralized order books are less practical.
- A clarification that operating a neutral execution infrastructure does not require a new registration.
The SEC's final determination on the proposal will have significant implications for how tokenized and traditional securities coexist and compete in U.S. markets.
