SEC Proposes Ending Trade-Through Rule, Shifting Market Order Standards
The SEC proposed rescinding the trade-through rule (Rule 611) on June 11, 2026.
Why it matters: This regulatory change will affect securities law compliance and trading strategies, crucial for corporate and financial legal professionals. It signals a significant shift in protecting investors and executing trades across venues.
- SEC Chairman Paul Atkins has consistently criticized the trade-through rule since 2005.
- The SEC proposes rescinding Rule 611 with a 60-day public comment period.
- Compliance cost savings for broker-dealers could range from $54.2 million to $77 million annually.
- The trade-through rule aimed to ensure trades occur at the best national bid or offer price.
On June 11, 2026, the U.S. Securities and Exchange Commission (SEC statement) proposed rescinding Rule 611, known as the "trade-through rule." This rule currently requires trades to execute at the national best bid or offer price to protect investors from inferior pricing.
SEC Chairman Paul Atkins, a long-time critic of this provision since its 2005 inception, explained the rationale behind the proposal. He called Rule 611 "a grave misstep" and expressed concern that it incentivized a proliferation of trading venues, creating market distortion and complex gamesmanship by some market participants.
The SEC is now soliciting public comment over a 60-day period as outlined in their proposal document. Industry stakeholders are encouraged to provide feedback before the SEC considers a final vote.
Importantly, the SEC estimates that eliminating the trade-through rule could save the brokerage industry between $54.2 million and $77 million annually in compliance costs, as reported by MarketScreener. This financial relief may lead to shifts in how broker-dealers manage execution and compliance frameworks.
The rule was originally designed as part of Regulation NMS to ensure investors received the best prices across multiple trading venues. However, critics, including Atkins, argue that the rule has caused fragmentation and complexity without clear investor benefits.
This development requires legal professionals in corporations and financial firms to reassess compliance and trading strategies in light of what could become a substantial alteration to market order protections and execution standards.
By the numbers:
- June 11, 2026 — Date SEC proposed rescinding Rule 611
- 60 days — Public comment period on the proposal
- $54.2 million to $77 million — Estimated annual compliance cost savings for broker-dealers
What's next: After the 60-day comment period, the SEC will review inputs before deciding on a final vote to rescind the trade-through rule.