Securities Regulation Daily Wrap Up, EXCHANGES AND MARKET REGULATION—Better Markets and SIFMA comment on SEC proposal to rescind trade-through rule, (Aug 18, 2026)

By R. Jason Howard, J.D.

Better Markets said the proposal would leave investors who want to receive the best prices on their trades unprotected and increase investors’ costs.

The Securities Industry and Financial Markets Association and its Asset Management Group (collectively “SIFMA”) and Better Markets have each commented on the SEC's proposal to rescind Reg NMS Rule 611, the trade-through rule, and Rule 610(e), the provision regarding locking and crossing quotations for NMS stocks.

The proposal to rescind the rules is in response to the evolution of the markets since the 2005 adoption of the rules. The Commission says the rules are no longer needed and their rescission would reduce costs for market participants.

Trade-throughs and locked markets. Adopted in 2005 as part of Regulation NMS, Rule 611 provides intermarket protection against trade-throughs for all national market system stocks. A trade-through occurs when a trading center executes an order at a price lower than a protected quotation displayed by another trading center. Adopted at the same time, Rule 610(e) restricts the “locking and crossing” of quotations in NMS stocks. A market is “locked” when the best bid price equals the best offer price, and it is “crossed” when the best bid exceeds the best offer.

SIFMA comments. SIFMA’s press release explains that its comment letter focuses on the downstream considerations which it believes are most important in assisting the Commission with its stated goals. SIFMA is supportive of the Commission’s efforts “to reduce regulatory-driven complexity and venue proliferation, and it noted that eliminating Rules 611 and 610(e) without addressing downstream effects across the broader market structure framework could raise new questions for investors and broker-dealers alike.” As such, SIFMA’s comment letter addresses best execution, the National Best Bid and Offer (NBBO), market data, locked and crossed markets and tokenized securities.

Better Markets. For its part, Better Markets states in its press release that the “so-called trade-through rule is a fundamental investor protection. It prevents trading centers from executing trades at worse prices than those available on other exchanges. In this way, it protects the execution of investors’ orders and guarantees they do not receive inferior prices. An SEC intent on fulfilling its mission to protect investors would support such a rule. Yet this SEC, under Chair Paul Atkins, is intent on undermining investors at every turn.”

The Better Markets comment letter explains that rescinding Rule 611 would prevent investors from receiving best execution, diminish the value of the NBBO, and would only benefit the crypto industry as it would facilitate the trading of tokenized securities. Better Markets agrees that the trade-through rule has fragmented the markets and something must be done but cautions that the Commission “must not rescind Rule 611 and leave investors to fend for themselves in an attempt to receive the best prices on their securities transactions,” because rescinding the rule “would leave investors who want to receive the best prices on their trades unprotected and increase investors’ costs.”

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