HPC and Douro Labs Support the SEC’s Proposal to Remove the Order Protection Rule

According to ME News, on August 17 (UTC+8), the Hyperliquid Policy Center (HPC) and Douro Labs, a core contributor to Pyth Network, jointly submitted a comment letter to the U.S. Securities and Exchange Commission (SEC) supporting the SEC’s June proposal to repeal Rule 611 of Regulation NMS (the “trade-through rule,” also known as the “order protection rule” or “trade-through rule”). This rule is a core provision under the U.S. National Market System (NMS) framework, requiring brokers to route orders to the trading venue offering the best price to ensure investors receive optimal execution. However, HPC and Douro Labs argue that this framework is built upon a centralized quote system and does not align with the actual operation of on-chain trading venues. The comment letter presents three key arguments: the SEC should adopt the repeal proposal; clear guidance should be provided to brokers on fulfilling their “best execution” obligations on-chain; such guidance should adopt principles-based standards, recognize independent reference price sources like Pyth as viable alternatives, and require the SEC to confirm that tokenized NMS stocks—i.e., tokenized versions of U.S. equities covered under this regulatory framework—remain protected under the investor protection framework. (Source: Foresight News)