SEC Grants Five-Year Relief for Tokenized Securities Venues
The conditional framework permits permissioned trading of tokenized National Market System stocks through automated market maker liquidity pools until Sept. 17, 2031.
The Securities and Exchange Commission has granted five-year, conditional relief for Tokenized Securities Venues to facilitate permissioned trading of tokenized National Market System (NMS) stocks through automated market maker liquidity pools.
The relief, issued Sept. 17, 2026, applies to parts of the Securities Exchange Act’s definitions of “exchange” and “dealer.” The exemption for qualifying venues and certain liquidity providers expires Sept. 17, 2031.
The framework does not represent a broad approval of decentralized finance, and the order does not address DeFi generally. The framework does not establish that Orca operates a Tokenized Securities Venue.
Participating venues must satisfy several conditions. These include limits on the number of stocks and trading volume, verification that tokenized stocks provide holders the same rights and privileges as equivalent traditional shares, and notice to issuers with an opportunity to object.
The framework also requires public and auditable smart contracts, coordinated trading halts and public operational disclosures. The conditions are intended to create a defined structure for observing tokenized stock markets while limiting the scope of the relief.
The SEC said the arrangement will allow the agency and market participants to examine how tokenized stocks trade on-chain and how those markets interact with traditional trading venues. The resulting information is intended to inform future policymaking.
“The Innovation Exemption, while temporary, would allow TSVs to trade tokenized NMS stock in a permissioned environment today while the Commission considers the need for additional action to facilitate onchain trading,” SEC Chairman Paul S. Atkins said Sept. 17.
SEC Commissioner Hester M. Peirce called the measure “a small step toward waking up to a tokenized tomorrow,” adding that the innovation exemption “may not be the stuff of mythology.”
The framework follows Project Open, a proposal submitted by the Solana Policy Institute, Superstate, Orca Creative and Lowenstein Sandler. The proposal described public-blockchain infrastructure for tokenized equities, including automated market makers, digital transfer agents and compliance controls.
The action extends the SEC’s broader work on tokenized securities, including the agency’s previously announced Innovation Exemption initiative. The five-year period runs through Sept. 17, 2031, giving the agency and market participants time to collect operational data before permanent rules are considered.
