HPC leads policy push as trade-through rule faces SEC chopping table

The Hyperliquid Policy Center (HPC) and Pyth Network contributor, Douro Labs, asked the Securities and Exchange Commission (SEC), on August 17 2026, to end Rule 611. Rule 611 is the 2005 trade-through rule.

HPC and Duro Labs argue that Rule 611 is unable to properly describe how stock trades are settled on public blockchains and are urging the SEC to allow independent onchain price feeds. Their joint comment letter was filed under docket S7-2026-20, with the comment window closing the same day the letter was filed. It’s now left to the SEC to decide.

What Rule 611 made brokers do?

Rule 611 is at the core of the market-structure framework launched in 2005. The framework is referred to as Regulation NMS, and the role of Rule 611 was clear and simple: a broker handling a customer order cannot execute at a worse price when a better one is displayed somewhere else. 

If an exchange displays a stock at $90.00 and another at $90.01, the broker has to use the $90.00 price.

For this to work, every US exchange had to be displayed in a single feed. Venues relay their prices to the securities information processors (SIPs), which post the NBBO (national best bid and offer), and it becomes a reference price for every broker executing an order.

On June 11, the SEC voted on a proposal to end two rules, Rule 611 and Rule 610(e). 

Rule 610(e) prevents exchanges from publishing quotes that lock or cross each other. 

Paul Atkins, the SEC Chairman, has opposed Rule 611 since its inception in 2005. If Rule 611 is repealed, it’s left to the broker to protect the customer’s interests as they are obliged to under FINRA rules. 

Why the national benchmark breaks down onchain

The main claim in the letter filed on August 17 is that the NBBO is not suitable for blockchain venues. The letter states three problems: 

• The national benchmark is often inoperative when a trade occurs, as the SIPs do not trade through nights, weekends, and holidays when blockchain markets are trading
• The benchmark does not accurately portray onchain conditions. Large asset holders like automated market makers do not post bids or offers; rather, they determine prices by formulas 
• The clocks are a mismatch. Refreshing a feed in microseconds does not move the needle for orders that are settled at a block boundary. 

The letter pegs it at around 200 milliseconds on Hyperliquid, 400 on Solana, 12 seconds on Ethereum, and ~10 minutes on Bitcoin. 

A different reference price

The letter enjoins the SEC to approve a “qualifying reference price” in place of the NBBO. The broker would use this price to measure onchain orders. The letter proposes four tests: 

• The price should be an aggregate of quotes from independent firms that typically set prices, with reported data on recency and validation
• Make use of methods that are manipulation-resistant
• Make its publishers and calculation logic public and easy to audit
• Ensure periodic checks against data from SIP and external sources

The letter went on to state that Douro Labs has built the Pyth Pro reference price, a service meant to meet those tests.

Who is pushing for this, and why now

The Hyperliquid Policy Center is not a neutral party in all of this. The Hyper Foundation launched the HPC in February 2026 with 1 million HYPE tokens (~$ 30 million back then) and appointed Jake Chervinsky, an experienced crypto lawyer, as the CEO.

The letter beckons the SEC to maintain the best-execution policy anchored in FINRA rather than at individual exchanges. They argue that rules adopted with immediate effect in June by NYSE American, NYSE Arca, NYSE National, and NYSE Texas have a conflict, because exchanges compete for the same order flow they are to regulate.

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