SEC grants temporary exemption for tokenized US stock trading

The US Securities and Exchange Commission approved a temporary exemption allowing limited trading of tokenized US stocks on certain onchain venues.

Under the innovation exemption approved Thursday, Tokenized Securities Venues (TSVs) can offer permissioned trading of tokenized National Market System (NMS) stocks.

The exemption covers trading through automated market makers and liquidity pools, subject to requirements including transaction transparency, recordkeeping and technology safeguards, SEC Commissioner Mark Uyeda said. TSVs must also regularly publish US dollar-denominated transaction data, including prices, trade sizes, timestamps, pool addresses, end-of-day pool sizes and daily volumes.

“The Innovation Exemption is designed to be controlled,” Uyeda said, adding that symbol and volume limits will apply. He said the framework would give the SEC data to assess onchain securities trading and inform future rules.

The SEC is seeking public feedback on the framework, including data, case studies and information from live or test environments.

The SEC had been developing the innovation exemption for months. In February, SEC Chair Paul Atkins said the regulator was considering a temporary framework that would allow limited trading of tokenized securities through automated market makers while it developed longer-term rules.

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