Ondo Finance has filed a comment letter with the U.S. Securities and Exchange Commission (SEC) backing the removal of a rule that has shaped how nearly every U.S. stock trade has worked since
Ondo Finance has filed a comment letter with the U.S. Securities and Exchange Commission (SEC) backing the removal of a rule that has shaped how nearly every U.S. stock trade has worked since 2005, while urging the regulator to build its replacement with tokenized markets in mind.
Ondo Finance is one of the largest tokenizers of securities, with about $4 billion in assets onchain, including tokenized U.S. Treasuries and stocks. Tokenization means issuing a blockchain-based version of a traditional asset.
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In June, the SEC proposed rescinding Rule 611 of Regulation NMS, the framework governing U.S. stock trading.
Chairman Paul Atkins said that after two decades, the rule had produced "unintended consequences" that hindered rather than enhanced market growth, and that the change was meant to simplify market structure and cut costs. The agency opened the proposal to a public comment period, which is what Ondo was responding to.
In the letter filed Aug. 11, Ondo said it supports rescinding Rule 611. Known as the "trade-through rule," Rule 611 has governed U.S. stock trading since 2005: it requires that an order be routed to whichever venue displays the best available price, so trades cannot be executed at a worse price when a better one is showing elsewhere.
It was meant to protect investors, but critics say it also splintered trading across many venues and entrenched a single way of executing orders.
Ondo argues the rule predates tokenization and was built for a market with one trading model. Today, it says, tokenized securities and traditional securities trade side by side and increasingly need to interact directly. The company said scrapping the rule alone is not enough.
The letter asks the SEC to apply the same execution standards to onchain and traditional markets, to formally recognize "request-for-quote" trading, a competitive pricing method already used in Treasury and bond markets, and to confirm that neutral trading infrastructure can operate without registering as a broker-dealer or exchange.
Ondo pointed to a stark cost gap to make its case: U.S. investors get some of the world's cheapest execution through traditional brokers, but accessing the same stocks onchain today can cost far more, largely because there is no recognized competitive standard for onchain trades.
Ondo framed the issue as a question of where onchain stock trading happens. Much of it is currently growing offshore, the company said, and getting the post-Rule 611 standard right is a chance to bring that activity onshore into the U.S. market system rather than cede it to overseas venues.
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