SEC Sets Conditional Five-Year Path for Tokenized U.S. Stock Trading

The Securities and Exchange Commission has granted temporary, conditional exemptions for some venues trading tokenized U.S. stocks, setting a limited path as Congress’s broader crypto bill remains stalled. The Sept. 17 order lets certain permissioned venues trade tokenized National Market System (NMS) stocks through automated market makers and liquidity pools. It exempts eligible venues from the Exchange Act’s definition of an exchange and certain liquidity providers from the definition of a dealer. The relief expires five years after publication. Earlier coverage of the SEC’s tokenized-stock exemption details the order’s limited scope. Token holders must receive the same rights and privileges as holders of equivalent traditional shares. If an unaffiliated third party tokenizes a stock, the venue must notify the issuer and wait at least 30 calendar days before trading begins.

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