Trading firms could drop costly exchange connections

The Securities and Exchange Commission in Washington wants to change how stocks are routed between trading venues. Its proposal would unwind Rule 611, which has required brokers and market makers to connect to exchanges posting the best prices. The SEC says those connections still add costs even as trading has changed.

For broker-dealers, market makers and other firms that route stock orders, the rule is not just a line in the rulebook. It means paying for connectivity, market-data feeds and routing systems that have to reach far enough to keep up with every protected quote, even when some of those links may add limited value. The commission’s view is that the market has changed enough that those costs now outweigh the benefit of keeping the old structure in place.

The price of staying plugged in

The proposal would do more than trim one provision. It would rescind the trade-through rule for NMS stocks and also drop the ban on locked and crossed quotations. Those changes would remove the current requirement that firms stay tied into the network of protected quotes across venues, and the SEC says that could reduce the fees tied to routing, data and compliance.

That matters because connectivity is not free. The agency says market participants have had to keep paying to stay linked to exchanges that may offer little practical value to them, simply because Rule 611 made broad access part of the job. In the SEC’s telling, this is less about changing who wins a trade than about cutting a structural expense that has been baked into order handling for years.

A thinner rulebook for stock routing

The rescission would also trigger conforming changes to related provisions and defined terms so the rest of Regulation NMS fits the new framework. The goal is to strip out the parts of the rulebook that make broad connectivity a requirement rather than a choice, and leave firms with a lighter set of obligations.

For firms that move NMS stock orders, the practical effect could be lower spending on connectivity and market data, along with less compliance work tied to maintaining links everywhere a protected quote appears. Comments are due Aug. 17, 2026.

The broader market test

The SEC is arguing that the old price-protection framework has become expensive to maintain in a market that is faster and more automated than the one it was built for. Whether firms agree will matter, because the rule reaches deep into the plumbing of stock trading, where small changes in access and fees can ripple through the entire order-routing system.

The SEC wants to drop Rule 611, the stock-market rule that pushes firms to stay connected to every venue with a protected quote.

If finalized, the change could cut routing, market-data and compliance costs for brokers and market makers.