Today, the Commission proposes to rescind Rule 611 of Regulation NMS as well as the prohibition on locking and crossing quotations. This proposal represents an important beginning in the broader, more complex journey of reforming the Commission’s equity market–structure rules.
Regulation NMS—in particular, Rule 611’s trade-through prohibition—has shaped market behavior for decades. Whatever benefits it may have provided in the past, we have repeatedly heard from market participants that in today’s evolving technology-driven trading environment, these provisions often introduce unnecessary complexities, burdens, and inefficiencies. By reconsidering them, the Commission is acknowledging that Rule 611 may no longer serve our markets or investors.
I commend the Divisions of Trading and Markets and Economic Risk and Analysis for their rigorous and transparent approach to this undertaking. The proposing release carefully lays out both potential benefits and risks and has allowed the Commission to engage in evidence-based rulemaking—while at the same time, calling for more data and engagement from the public. This thoughtful, measured process aligns with the SEC’s statutory mandate to balance investor protection, market integrity, and capital formation.
Of course, this proposal is not an endpoint. Rather, it marks the start of a journey into terrain that is less familiar. Removing Rule 611 would unsettle long-standing assumptions in our market structure and inevitably raise questions regarding best execution, transparency, trading mechanics, and investor confidence. While the road ahead may be less certain, it may also lead to a market structure that is more adaptive, resilient, and better aligned with how trading actually occurs today. Public comment and robust economic analysis will be essential in helping us navigate this new course and identify the challenges and opportunities it may reveal.
I look forward to hearing from broker-dealers, trading venues, institutional investors, retail investors, academics, and other market participants. I hope commenters will consider, among other things, how execution quality and best execution practices might evolve in the absence of Rule 611 or a prohibition on locked and crossed markets, and what new forms of transparency might be necessary to support informed decision‑making in such an environment.
In addition to the Divisions of Trading and Markets and Economic Risk and Analysis, I thank the staff in the Office of General Counsel for commencing this important review of Rule 611. Engagement from all corners of the marketplace will help us devise an approach that both strengthens and modernizes our equity markets.
Thank you.
