SEC Proposed Best Execution Rule Would Reshape Listed Equities, On-Chain Markets
In-house counsel for broker-dealers, public companies, crypto trading platforms, and asset managers must track this proposal, as it would impose new best execution compliance obligations and alter trading practices across both traditional listed equities and on-chain digital asset markets.
The U.S. Securities and Exchange Commission has issued a proposed rule that would replace decades-old rigid order routing mandates for listed equities with a flexible best execution standard, while extending similar requirements to on-chain trading platforms that facilitate trades of securities-like digital assets. The proposal is designed to modernize trading rules to align with evolving market structures, including the growth of crypto trading venues. If adopted, the rule would require market participants to document and prove that client orders are executed at the most favorable available terms, rather than following pre-specified routing rules. In-house counsel for affected market participants should review the proposal promptly to identify potential compliance gaps and consider submitting comments during the SEC’s public comment period.