https://www.sec.gov/comments/S7-2026-20/s7202620-996359-3131006.pdf
August 9, 2026
Via electronic submission (rule-comments@sec.gov)
Ms. Vanessa A. Countryman
Secretary
U.S. Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-1090
Re: File No. S7-2026-20; Release No. 34-105655 — Proposed Rescission of Rule 611 (the Order Protection Rule) and Rule 610(e) (the Locked and Crossed Markets Provisions) of Regulation NMS
Dear Ms. Countryman:
I submit this letter in opposition to the proposed rescission of Rule 611 and Rule 610(e) of Regulation NMS. I ask the Commission to withdraw the proposal or, at minimum, to defer any rescission until an enforceable replacement framework for intermarket price protection is adopted and tested.
I write from both sides of the market this proposal would change. I am Andy Altahawi, founder and Chief Executive Officer of Adamson Brothers, and the principal of Directly Listed, an advisory practice for companies pursuing initial public offerings, direct listings, and uplistings on NYSE and NASDAQ. Adamson Brothers Inc. was a full-service U.S. broker-dealer and investment banking firm registered with FINRA under CRD #46684. For many years the firm operated as a market maker, alongside equity and bond trading, options, mutual funds, and a corporate finance practice that took hundreds of companies public on U.S. exchanges and the OTC markets. Throughout its broker-dealer years, neither the firm nor I was ever the subject of a customer complaint or a regulatory citation from FINRA, the SEC, or the NASD.
Before founding Adamson Brothers in 1998, I served as Senior Vice President in the Investment Banking division of Prudential Securities (1994–1999), then led by Wick Simons, the former Chairman of NASDAQ. I have held FINRA registrations since 1994, including the Series 55 equity trader, Series 24 general securities principal, Series 4 registered options principal, and Series 79 investment banking qualifications, together with the Series 3, 6, 7, 63, and 65 examinations. In parallel, I have practiced law internationally since 1988, concentrating on cross-border corporate structuring, commercial arbitration, and governance counsel to boards of publicly traded companies. Additional background on my securities and legal work is available at andyaltahawi.com and andyaltahawiSEC.com.
I offer that history because it bears directly on the question before the Commission. I made markets before Regulation NMS, supervised traders under Rule 611 after 2005, and now advise issuers whose listings depend on the integrity of the consolidated quotation. From each of those seats the conclusion is the same: rescinding Rule 611 and Rule 610(e) without a defined successor would weaken displayed liquidity, degrade the national best bid and offer, and shift value from investors to a small group of dominant wholesalers.
1. A market maker’s view: quote protection is what makes displayed liquidity worth providing
A market maker’s displayed quote is a firm, public commitment of capital. Rule 611 gives that commitment legal meaning: a protected quotation at the best price cannot simply be bypassed by a trading center executing at an inferior price. Having run market-making operations, I can say plainly that the willingness to display size at the inside depends on the expectation that the displayed price will be respected. Strip away that protection and the displayed quote becomes a free option granted to faster or better-informed counterparties, who may trade around it at will. The rational response of every liquidity provider is to display less, quote wider, and move more activity into non-displayed channels. The proposal would not merely remove a compliance obligation; it would remove the incentive structure that has supported displayed limit orders, from retail customers and professionals alike, for two decades.
2. The Commission’s own economic analysis concedes the harm
The proposing release acknowledges that, after rescission, wholesalers could trade through displayed round-lot quotations, that retail investors could receive worse prices as a result, and that the change could transfer value from retail investors to wholesalers in the form of higher wholesaler profits. That admission should end the inquiry. The Commission’s mandate is investor protection and the maintenance of fair and orderly markets; a rule change the Commission itself expects to move money from investors to intermediaries fails that test on the face of the release. The cost-benefit arithmetic makes the imbalance worse: the release estimates compliance savings on the order of $31,000 per trading center, while the harm to investors from inferior executions is plausibly measured in the hundreds of millions of dollars annually. No sound weighing of costs and benefits trades a modest operational saving for a recurring, market-wide wealth transfer away from the investing public.
3. Best execution is not a substitute for order protection
The proposal relies on broker-dealer best execution duties, principally FINRA Rule 5310, to fill the gap. As someone who supervised a FINRA member firm as a Series 24 principal, I respectfully submit that this substitution does not work. Rule 611 operates mechanically at the moment of execution, order by order, and it protects the customer whether or not anyone later reviews the trade. Best execution is a facts-and-circumstances standard applied through policies, periodic reviews, and after-the-fact analysis of aggregate execution quality. It is a supervisory obligation, not a price guarantee, and it was never designed to carry the full weight of intermarket price protection. The Commission withdrew its own Regulation Best Execution proposal; rescinding Rule 611 while pointing to a best execution regime the Commission declined to strengthen leaves investors with less protection at both ends.
4. Rule 610(e) and the reliability of the national best bid and offer
The locked and crossed markets provisions are not cosmetic. A quotation stream that is routinely locked or crossed corrupts the reference price on which the rest of the market structure depends: stop and conditional order triggers, midpoint and pegged order types, options pricing and hedging, Limit Up-Limit Down bands, and the execution-quality statistics investors use to judge their brokers. These conditions matter most at the open, at reopenings, around new listings and initial public offerings, and in thinly traded securities, which is precisely where the companies I advise first meet the public market. Rescinding Rule 610(e) with nothing in its place invites persistent, and in some cases strategically induced, locked and crossed conditions in the very securities least able to absorb them.
5. The benefits concentrate; the costs disperse
The gains from rescission flow to a handful of large wholesalers and internalizers with the scale to profit from routing discretion. The costs fall on everyone else: retail investors through inferior executions, smaller exchanges and ATSs through lost order flow, issuers through weaker price discovery, and small and mid-sized broker-dealers through a compliance regime that becomes more subjective and more resource-intensive at the same time. Having built and operated a multi-office FINRA member firm, I can attest that objective, mechanical rules are what allow smaller firms to compete on service and execution rather than on the size of their compliance departments. Replacing a clear rule with open-ended supervisory expectations advantages the largest incumbents and accelerates the concentration the Commission should be guarding against.
6. The issuer’s seat: listings depend on a credible public quotation
Through Directly Listed and Adamson Brothers, I work with private and public companies, many of them foreign issuers, preparing for U.S. exchange listings, and I have had advisory exposure to widely followed direct listings on NYSE and NASDAQ. What draws issuers to the U.S. market is the credibility of its public price: a consolidated best bid and offer that investors, boards, and courts can rely on. Direct listings in particular depend on transparent reference prices and orderly opening price discovery, because there is no underwritten book to fall back on. If displayed quotations lose protected status and locked and crossed markets go unpoliced, the reliability of that public price erodes, and with it one of the strongest arguments for listing in the United States rather than elsewhere. At a moment when the Commission is rightly asking how to make public markets more attractive to operating companies, this proposal points in the opposite direction.
7. If the Commission nonetheless proceeds
Should the Commission determine to move forward despite these objections, it should not treat rescission as a simple deletion. At minimum, the Commission should:
1. adopt a clear, objective, and enforceable best execution standard for orders of retail size before any rescission takes effect, not after;
2. preserve a narrowly tailored trade-through protection for displayed retail-sized limit orders, so the individual investor’s resting order retains order-by-order protection;
3. phase implementation and publish post-implementation data on execution quality, displayed liquidity, off-exchange share, locked and crossed conditions, and wholesaler concentration; and
4. retain and state its readiness to use corrective authority, including reintroduction of targeted protections, if displayed liquidity or retail execution quality deteriorates.
Rule 611 and Rule 610(e) are imperfect, and the market of 2026 is not the market of 2005. But the answer to an aging safeguard is a better safeguard, not an empty space where the safeguard used to be. I urge the Commission to withdraw the proposal.
I appreciate the opportunity to comment and would be pleased to discuss any of these points with the Commission or its staff.
Respectfully submitted,
Founder and Chief Executive Officer
Adamson Brothers Corp. (former FINRA-registered broker-dealer and market maker, CRD #46684)
This post is provided for informational purposes only and is not investment advice or a solicitation. See our Disclaimer, Terms of Use, and Privacy Policy.