Blockchain Association backs SEC’s proposal to scrap outdated NMS rules, citing tokenization benefits
RWA Signal Insight
StocksThe Blockchain Association has formally endorsed the SEC's proposal to repeal outdated Regulation NMS rules, arguing that these 2005-era mandates hinder modern market efficiency. By advocating for the removal of these legacy requirements, the industry group aims to clear regulatory hurdles that currently impede the integration of blockchain-based trading systems. The association contends that the existing framework has failed to achieve its stated objectives and instead creates unnecessary friction for digital asset innovation. This move is significant for the RWA market because it signals a concerted effort to align federal securities regulations with the operational realities of tokenized assets. Removing these barriers could facilitate more seamless liquidity and settlement processes for tokenized securities on public and private blockchains. The industry's push reflects a broader strategy to modernize market infrastructure to better accommodate the unique technical capabilities of distributed ledger technology. Ultimately, this regulatory shift could serve as a catalyst for increased institutional adoption of tokenized financial instruments by providing a clearer, more compatible legal environment.
Key points
- Blockchain Association supports SEC proposal to repeal 2005 Regulation NMS rules.
- Legacy market rules are cited as primary barriers to tokenized asset efficiency.
- Repeal aims to modernize infrastructure for blockchain-based securities trading and settlement.
- Industry group claims current regulations failed to meet original market objectives.
Background
Regulation NMS, or the National Market System, was established by the SEC in 2005 to modernize the U.S. equity markets and ensure fair competition. It introduced rules like the Order Protection Rule, which requires trading centers to provide the best displayed price to investors. These rules were designed for a traditional, fragmented exchange environment rather than the instantaneous, unified settlement capabilities offered by blockchain technology.