Techub News, citing CoinDesk, reported that the U.S. Securities and Exchange Commission has proposed abolishing the order protection rule that has been in place for 20 years. The proposal centers on removing a key structural barrier that has stood in the way of automated market makers, or AMMs, trading tokenized U.S. stocks on-chain.
A 20-Year Rule Comes Under Review
Under the existing order protection rule, trading venues are required to route orders to the exchange offering the best quoted price for execution. While this framework shapes execution in traditional securities markets, it has also limited the role that AMMs can play when tokenized securities move into on-chain trading environments.
According to the report, the SEC’s proposal is expected to create a clearer compliance path for decentralized trading platforms and the broader RWA tokenization sector. If the rule is removed, tokenized U.S. stock trading on-chain would face one less structural constraint tied to order-routing requirements.