SEC Opens Five-Year Path for Tokenized U.S. Stock Trading
The temporary framework allows qualifying venues to use permissioned automated market makers, but no company has been approved as a trading venue.
The Securities and Exchange Commission has created a five-year framework for limited on-chain trading of tokenized U.S. stocks, while leaving the first approved venue and stock list unconfirmed.
The temporary exemption, issued Sept. 17, allows qualifying Tokenized Securities Venues to use permissioned automated market makers and liquidity pools without being treated as exchanges under the Securities Exchange Act. Certain proprietary-capital liquidity providers can also receive conditional relief from the law’s dealer definition.
The framework expires Sept. 17, 2031. The first tier permits no more than 75 stock symbols, with trading capped at one-quarter of the prior month’s average daily volume for each underlying stock. Tier 2 products can include up to 250 symbols and 2.5% of that volume.
Tokenized shares must give holders the same rights and privileges as equivalent traditional shares. For third-party tokenizations, an unaffiliated issuer must receive at least 30 calendar days to object before trading begins. The relief does not cover products that create synthetic exposure, including linked tokenized securities and tokenized security-based swaps.
Operators must publish an operating notice at least 30 calendar days before launching and notify the SEC within one business day. The order establishes eligibility conditions, not blanket approval for tokenized-stock issuers or trading platforms.
