On June 17th, 2026, the Securities and Exchange Commission proposed amendments to rescind rule 611 of Regulation National Market System, better known as the trade-through rule, which has governed equity trading since 2005. Americans for Tax Reform released a statement applauding the proposal, calling it "a positive development that will help address increasing fragmentation in U.S. equity market structure and deregulate the securities exchange ecosystem." The organization argues that the rule, originally designed to protect investors by ensuring they get the best possible price, has instead made investors worse off while adding unnecessary costs for broker-dealers.
The trade-through rule was adopted in 2005 by a 3-2 vote as part of Regulation NMS, with the goal of protecting investors by prohibiting brokers from executing trades at prices considered inferior to the "best possible price" available on a listed exchange. Since the regulation was adopted, the number of nationally listed exchanges has nearly doubled from around nine venues to sixteen. The New York Stock Exchange charges tens of thousands per month for broker-dealers and enterprises for data licensing. One study cited in the report found that retail orders filled internally by broker-dealers for an average S&P 500 stock see "price improvement amounting to 47% of the quoted spread," while exchanges offer only 3% price improvement in the full sample and 5% in S&P 500 stocks.
According to Americans for Tax Reform, "the trade through rule mistakenly elevates and prioritizes price over all other aspects of trade execution, which ironically can lead to outcomes where investors obtain worse prices than if they were not subject to the trade through rule." The organization writes that the rule "ignores other aspects that factor into the quality of trade execution such as the probability that the order is filled, speed, and preventing information leakage." The report concludes that "the SEC's policy demonstrates why government interference in markets under the guise of investor protection often backfires."
The report explains that the increasing fragmentation of equity trading venues has created material consequences for brokers, who are now forced to collect live data and connect to each exchange that can potentially offer a nationally protected price for a stock to avoid accidentally trading through the best price. The fees associated with connecting to multiple exchanges add up quickly. More significantly, the rule doesn't necessarily guarantee investors the best price available because it fails to account for market liquidity—the volume of available shares at a specific price point. For large institutional orders, this creates a problem: if a pension fund wants to buy 10,000 shares of a stock, the broker needs to find 10,000 shares being sold at that price. But under the trade-through rule, large orders can go unfulfilled if they're routed to an exchange with the best price but insufficient liquidity, inadvertently revealing the order to other market actors who can then push prices up, ultimately causing the order to be filled at a worse price due to information leakage.
Americans for Tax Reform argues that concerns about weakening investor protections are unfounded, noting that brokers remain subject to FINRA rule 5310, which requires broker-dealers to use reasonable diligence to find the best price under prevailing market conditions—a more flexible standard that doesn't ignore factors like liquidity and speed. The organization supports Chairman Atkins's move to correct what it calls "an overstep by the SEC," concluding that market forces and competition among broker-dealers already ensure investors get the best possible outcomes without the rigid constraints of rule 611.