SEC launches five-year exemption for tokenised stock trading

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The US Securities and Exchange Commission (SEC) has introduced a five-year “Innovation Exemption” allowing certain venues to facilitate onchain trading of tokenised stocks.

The temporary exemption covers Tokenized Securities Venues (TSVs), which can use permissioned automated market makers and liquidity pools to trade tokenised National Market System stocks. The SEC said the measure took effect on 17 September and is subject to conditions including trading limits and investor protection requirements.

The order also provides temporary relief from the dealer definition for certain liquidity providers that supply tokenised stocks to TSVs. Tokenised stocks must provide holders with the same rights and privileges as equivalent traditional shares, while issuers can object to third-party tokenisation of their stock.

SEC Chair Paul Atkins said the exemption would help move US capital markets onchain. The SEC is also seeking public comments as it considers longer-term rules for tokenised securities.