SEC Grants Five-Year Tokenized-Stock Relief as CLARITY Act Fails to Advance

The Securities and Exchange Commission has granted qualifying venues a five-year, conditional exemption to trade selected tokenized U.S. stocks, setting a limited federal route as the CLARITY Act fails to advance in the Senate.

Issued Sept. 17, the order covers Tokenized Securities Venues (TSVs) that trade permissioned tokenized National Market System (NMS) stocks through automated market makers and liquidity pools. It exempts qualifying venues from the Securities Exchange Act’s definition of an “exchange” and certain liquidity providers from the law’s definition of a “dealer.”

The SEC’s five-year relief for Tokenized Securities Venues applies to that specified venue, stock and trading setup. The exemption expires five years after publication, making it a temporary measure rather than a general crypto market-structure framework.

The order sets separate activity thresholds. Tier 1 is limited to 75 stock symbols and 0.25% of the applicable underlying stock’s prior-month average daily share volume. Tier 2 allows up to 250 symbols and 2.5%. For each applicable stock, the volume ceiling is measured against that stock’s prior-month average daily share volume.

The exemptions address two different statutory roles: the trading venues and certain liquidity providers. Their conditions also cover investor rights and trading controls. TSVs must verify that token holders receive the same rights and privileges as holders of equivalent traditional shares. Smart contracts must be public and auditable on a public, permissionless ledger, and tokenized trading must stop when the underlying stock is halted on its primary listing exchange.

The Senate action came two days earlier. Senators voted 49-50 on Sept. 15 on whether to invoke cloture on a motion to proceed with H.R. 3633, the CLARITY Act. The motion failed, keeping the bill from advancing through that procedural step; the Senate did not vote on final passage.

The SEC order addresses a narrow tokenized-stock use case, while the failed Senate motion left the broader legislation unadvanced. The order’s limits apply to eligible venues and trading activity, and its five-year term runs from publication.