Robinhood is throwing its weight behind an SEC proposal to kill a rule that most retail traders have never heard of, but one that quietly shapes every stock trade they make.

The company submitted a comment letter supporting the rescission of Rule 611, a regulation originally adopted in 2005 under Regulation NMS that prohibits “trade-throughs” in equity markets. In plain English: the rule requires brokers to route orders to whichever exchange is displaying the best price at that moment, even if executing elsewhere would be faster or cheaper overall.

A 2005 rule in a 2026 market

Matt Billings, Robinhood’s Vice President of Brokerage, made this case directly to Congress during a hearing on May 20, 2026. He argued that the rule reflects a market structure that no longer exists and that removing it wouldn’t compromise investor protections. Best-execution obligations under FINRA Rule 5310 would still require brokers to seek the most favorable terms for their customers.

The rule doesn’t just mandate best-price routing. It creates layers of compliance infrastructure that every broker and exchange must maintain. That complexity translates directly into operational costs, which ultimately get passed along to investors in various forms.

The SEC formally proposed rescinding Rule 611 on June 11, 2026, with Chairman Paul S. Atkins leading the push for reform. The proposal also addresses Rule 610(e) regarding locked and crossed markets, situations where buy and sell prices on different exchanges overlap or match in ways that create confusion.

Industry roundtables held throughout 2025 laid the groundwork for these changes, with market participants debating whether decades-old market structure regulations were helping or hindering modern trading.

The crypto angle nobody’s talking about

Rule 611 has historically presented barriers to developing on-chain or tokenized versions of US equities. The trade-through prohibition assumes a market structure built on traditional exchanges with consolidated quote systems. Blockchain-based trading venues don’t fit neatly into that framework.

Removing Rule 611 could clear a significant regulatory obstacle for firms looking to offer tokenized equity products, potentially enabling stocks that settle on-chain with faster finality and trading beyond the traditional 9:30 AM to 4:00 PM window.

Robinhood already routes most retail orders to wholesalers and emphasizes price improvement in its disclosures.

What this means for investors

Critics of eliminating Rule 611 argue that the trade-through prohibition exists for a reason: it prevents brokers from executing at inferior prices when better ones are available elsewhere. Without it, the concern is that some market participants might prioritize speed or cost savings over achieving the best price for customers. The counterargument, which Robinhood is making, is that FINRA’s best-execution rule already handles this.