SEC proposes scrapping stock-routing rule for better prices

In Washington, the Securities and Exchange Commission is proposing to scrap Rule 611, the trade-through rule for National Market System, or NMS, stocks. The agency says a rule built to keep traders from skipping over better prices also helped turn stock routing into a compliance maze.

That maze is not abstract. The SEC says trading centers now need extra logic to avoid trade-throughs, and many of the order types built around that logic have become standard across equity exchanges.

The workarounds became the market

The commission says many of those tools were developed in response to Rule 611 and other Regulation NMS requirements. Among them are intermarket sweep orders, or ISOs, and price-to-comply orders, along with variations of both. Those orders were created to help traders work around the rule without violating it, but over time they became part of the ordinary machinery of stock trading.

That is the heart of the SEC’s argument. What began as a way to preserve the best available price now comes with a layer of routing logic, order flags and exchange-specific handling that the agency says adds cost and complexity for broker-dealers, market makers and trading venues.

A narrower rulebook

The proposal would do more than remove the trade-through rule. It would also rescind the provision that bars locked and crossed quotations for NMS stocks and make related conforming changes, a broader cleanup of the market structure text the SEC says has outlived its usefulness.

If the change goes through, the agency says firms may be able to use simpler routing and fewer specialized order types. The public still has a chance to weigh in: comments are due Aug. 17, 2026.