SEC Approves Limited Trading of Tokenized Stocks on On-Chain Platforms

BlockBeats news, September 17 — The U.S. Securities and Exchange Commission (SEC) approved a temporary, conditional exemptive provision allowing limited trading of tokenized stocks on on-chain platforms.

Commissioner Mark T. Uyeda issued a statement on the "innovation exemption." The exemption is a temporary, conditional exemption that permits limited trading of tokenized regulated stocks on specified on-chain venues—namely "Tokenized Securities Venues" (TSVs)—with the goal of enabling the Commission to further understand how such venues operate and to inform future policymaking. Uyeda stated that technological innovation often precedes the rulebook, and the Commission's goal should be to focus on outcomes and apply technology-neutral regulation, maintaining investor protection and market integrity while adapting to the on-chain environment. The exemption allows "Tokenized Securities Venues" (TSVs) to temporarily avoid concerns of being deemed an "exchange" under the Exchange Act when providing permissioned trading of tokenized regulated stocks through innovative automated market makers and liquidity pools, subject to conditions including public notice, trade transparency, cessation of coordination, bookkeeping, and technical safeguards.

The exemption is designed as a controlled model, with ticker restrictions and volume caps based on price-limit tiers, and requires regular public disclosure of USD-denominated trading data, including price, size, time, pool address, end-of-day pool size, and daily trading volume, to reduce information asymmetry and support monitoring and research. In addition, the exemption includes tailored relief for certain market makers providing liquidity with their own funds, offering regulatory clarity when disclosure and recordkeeping conditions are met.