The Hyperliquid Policy Center (@HyperliquidX) and Douro Labs, a core contributor to Pyth Network (@PythNetwork), have filed a joint comment letter urging the U.S. Securities and Exchange Comm
The Hyperliquid Policy Center (@HyperliquidX) and Douro Labs, a core contributor to Pyth Network (@PythNetwork), have filed a joint comment letter urging the U.S. Securities and Exchange Commission (SEC) to repeal Rule 611, the so-called trade-through rule that has governed U.S. equity market structure for two decades.
Rule 611, adopted in 2005 as part of Regulation NMS, requires trading venues to prevent executions at prices worse than the best publicly quoted price available on any other exchange, known as the National Best Bid and Offer (NBBO). In practice, it obliges brokers and trading centres to route orders to wherever the best price is displayed. The SEC itself moved first: on June 11, 2026, the SEC proposed rescinding Rule 611 and Rule 610(e), both central components of Regulation NMS since 2005.The proposal is grounded in the SEC's assessment that changes in market structure, including increased exchange competition, technological developments, and evolving trading practices, warrant reconsideration of the current regulatory framework.Comments on the proposal were due by Monday, August 17, 2026.
The Hyperliquid Policy Center and Douro Labs formally requested the SEC to repeal Rule 611 in a joint comment letter, arguing the 2005 framework is incompatible with the trading and settlement mechanisms of public blockchains.The rule requires routing orders to the best price displayed across traditional markets via the NBBO, a centralised system that goes offline during nights and weekends and fails to reflect the algorithmic mechanics of automated market makers (AMMs).
Their joint comment letter was filed under docket S7-2026-20, with the comment window closing the same day the letter was filed.The letter was signed by Brandon H. Ferrick, general counsel of Douro Labs, and Brad Bourque, senior counsel at the Hyperliquid Policy Center.
The groups are not only calling for repeal. Repealing Rule 611 is only half of what the two organisations are asking for. The other half is principles-based best-execution guidance designed specifically for onchain markets.Onchain trading introduces complications that did not exist when those rules were written, including network fees (gas costs) that eat into execution quality, and maximal extractable value (MEV), which lets validators and sophisticated actors reorder transactions to profit at a trader's expense.
On broker obligations, the letter calls for clearer rules covering how brokers route orders to onchain markets, while maintaining that tokenized U.S. equities should remain subject to existing securities rules. The letter also states that Douro Labs has built the Pyth Pro reference price, a service intended to meet those best-execution tests, positioning Pyth price feeds as independent references for situations where the NBBO does not apply. The Hyper Foundation launched the Hyperliquid Policy Center in February 2026, appointing Jake Chervinsky, an experienced crypto lawyer, as CEO.
Sources:Crypto Briefing: Hyperliquid Policy Center and Douro Labs urge SEC to repeal trade-through ruleWilmerHale: The SEC Takes Aim at the Trade-Through RuleFederal Register: Trade-Through Rule and Locked and Crossed Markets Provisions of Regulation NMS
