- The SEC Crypto Task Force has scheduled another roundtable for December 16.
- The roundtable, which is likely the last for the year, would explore the Commission’s trade-through prohibition in order to get meaningful inputs from stakeholders and the public.
The US SEC’s Securities and Exchange Commission’s Crypto Task Force has scheduled another public roundtable for December 15, where it intends to discuss extensively matters related to “financial surveillance and privacy.” This roundtable, said the Commission, “is a follow-up to the SEC’s Sept. 18, 2025, Roundtable on Trade-Through Prohibitions.”
Crypto Roundtable To Discuss Rule 611 Trade-Through Prohibition
The upcoming crypto roundtable will explore opinions from industry stakeholders and the general public on how to tackle the loopholes in the SEC’s Reg NMS (Regulation National Market System) that high-frequency trading firms are exploiting.
“Reg NMS and its Rule 611 have not served investors or broker-dealers well, given the market distortion and resulting gamesmanship by those that seek to take advantage of the Reg NMS structure,” said SEC Chair Paul S. Atkins.
“It is incumbent upon the Commission to give the public an opportunity to weigh in on items in our rulebook that deserve a refresh, and I look forward to the input we will receive on various aspects of the Rule 611 trade-through prohibition applicable to NMS stocks and the analogous NMS plan trade-through prohibition applicable to listed options.”
Limitations Of The Trade Through Prohibition
The Trade-through Prohibition ensures that brokers pass orders to exchanges with the best NBBO (National Best Bid or Offer) so that investors get the best possible prices on their stocks or other digital assets. It was adopted in June 2007 as part of the Commission’s Reg NMS and finally became effective a month later, following some implementation delays.
Although the prohibition serves the interests of investors and certain broker-dealers, it has several drawbacks that need to be addressed, hence the public roundtable. Firstly, passing every order to the NBBo could significantly slow down execution.
Again, high-speed traders could exploit the small timing differences across exchanges to profit from minute price differences. Furthermore, the NBBO presents small quantities that are not sufficient to adequately fill an order, thereby clamping down on trading efficiency.
The result is that the brokers and investors whom the rule is meant to protect end up not seeing any best execution, given the tactful rigging of the trading system by high-frequency market actors.
Since 2025, the SEC has held a series of roundtables addressing pertinent matters in the agency and the digital asset economy. By engaging meaningfully with stakeholders, legal practitioners, experts, companies, and the general public, the Commission can gather quality insights with which to make informed decisions in rulemaking, enforcement, and disclosure requirements.
The Commission’s publicity of these roundtables ensures transparency and fosters public trust in the dispensation of its regulatory duties. This series of conferences consolidates the shift from a regulation by enforcement style to one that involves useful and collaborative dialogue as part of the rulemaking process.
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