One Market, Onchain and Off: Our Comment to the SEC on Rule 611

This week, Ondo filed a remark letter with the SEC on its proposal to rescind Rule 611 of Regulation NMS: the rule governing how almost each U.S. inventory commerce has been executed since 2005.

Rule 611 routes orders to whichever venue reveals the finest displayed value. It was constructed for a market with one prevailing execution mannequin. 20 years later, tokenized and conventional securities commerce facet by facet, and more and more want to work together straight to finest serve buyers.

We assist rescission. The rule predates tokenization, and it was by no means constructed to account for a market the place tokenized and conventional securities coexist.

However rescission alone is not sufficient. Our letter additionally asks the SEC to:

• Acknowledge the identical execution requirements for onchain and offchain markets alike
• Acknowledge competed request-for-quote execution, so tokenized orders get priced and stuffed competitively
• Affirm that impartial execution infrastructure can function with out registering as a broker-dealer or change, so no single venue decides how trades join

Ondo Shares already routes trades straight into present change order books, somewhat than recreating liquidity individually, by selection, not regulatory mandate. Tokenized markets work finest on the identical aggressive phrases as the markets they’re constructed on, not on lesser ones.

There are broader market pursuits at stake right here too. Onchain buying and selling in U.S.-listed shares is rising, and proper now a lot of it’s rising offshore. Getting the post-Rule 611 normal proper is an opportunity to deliver that exercise onshore as a substitute, into the market system the U.S. spent many years constructing.

We glance ahead to working with the SEC to outline what the post-Rule 611 normal ought to appear to be: one constructed for tokenized and conventional markets to work easily for buyers no matter how they select to commerce. The total letter is linked beneath.

Filing