The US Securities and Exchange Commission has proposed eliminating its order protection rule, a cornerstone of American equity market structure since 2005. According to a report from CoinDesk on June 12, 2026, the change would remove one of the main structural barriers that has kept automated market makers (AMMs) out of trading tokenized US securities.
The order protection rule, part of Regulation NMS, requires brokers and trading venues to route an order to whichever venue is displaying the best available price. It was designed to stop "trade-throughs," cases where a trade executes at a worse price while a better quote sits unfilled somewhere else. For two decades it has been a defining feature of how US stocks change hands.
The rule that AMMs cannot satisfy
An automated market maker prices trades against a pool of assets using a formula, not a displayed order book with a single best quote. That design is what makes AMMs the dominant trading model in DeFi. It is also what makes the order protection rule a wall. A pool-based venue cannot easily prove it matched the national best displayed price at the moment of execution, because it does not quote that way in the first place.
Removing the trade-through obligation would take that conflict off the table. If venues no longer have to guarantee execution at a centrally displayed best price, an AMM holding tokenized shares could quote and settle trades on its own terms. The SEC's proposal, as reported, frames the deletion as clearing a path rather than building a new framework, which is a faster way to change behavior than writing fresh rules.
A proposal, not a done deal
Worth stating plainly: this is a proposed change, not a final rule. SEC rulemaking runs through a notice-and-comment process, and a proposal of this scale would draw heavy input from exchanges, market makers, and investor-protection groups before anything takes effect. The order protection rule has defenders who credit it with tightening spreads and protecting retail orders, so the comment period is likely to be contested.
The reason the proposal still matters today is the direction it signals. Scrapping a 20-year market structure pillar is not a quiet technical edit. It tells tokenization issuers and DeFi builders that the agency is willing to remove old equity-market plumbing rather than force onchain trading to imitate it.
Onchain securities have been waiting for this
The timing lands in the middle of a tokenization push. Over the past weeks, Citigroup outlined a plan for tokenized private-company securities, DBS moved to sell tokenised physical gold to retail customers in Singapore, and Circle brought institutional bitcoin onchain. Most of these efforts still settle through permissioned or order-book-style venues precisely because pool-based trading sat in a regulatory grey zone for US securities.
An AMM model would change the liquidity picture for tokenized stocks. Instead of waiting for a matched buyer and seller, holders could trade against a standing pool at any hour, the same way they swap tokens on a decentralized exchange today. That is the practical unlock the proposal points toward, assuming it survives the rulemaking process intact.
The connection to onchain spending
Tokenized equities, stablecoins, and the wallets behind crypto cards increasingly share the same settlement rails. When more real-world assets can trade and settle onchain through pool-based venues, the balances sitting in a self-custody wallet that funds a card start to include more than just crypto-native tokens. A friendlier stance on AMM trading of US securities widens what onchain liquidity can hold, which over time feeds the same infrastructure that powers stablecoin spending and onchain card top-ups.
None of that is immediate. The proposal has to clear comment periods, possible revisions, and the threat of legal challenge. For now, the concrete development is the SEC putting a two-decade-old rule on the chopping block and naming AMMs and tokenized securities as part of the reason.
Overview
The SEC has proposed removing its order protection rule, the 2005 trade-through ban at the center of US equity market structure, in a move that would remove a key barrier blocking AMMs from trading tokenized US securities. It is a proposal, not a final rule, and faces a contested comment period. The significance is directional: the agency is signaling it will dismantle legacy equity plumbing rather than force onchain venues to mimic it, which would clear the way for pool-based trading of tokenized stocks and tie those assets more closely to the rails behind stablecoins and crypto cards.
