SEC Approves Five-Year Exemption for Tokenized Stock Trading
The U.S. Securities and Exchange Commission (SEC) has granted a five-year exemption to allow tokenized U.S.-listed stocks to be traded on permissioned automated market makers and liquidity pools without registering as national securities exchanges.
The framework, which was announced on September 17, covers tokenized National Market System stocks and grants temporary relief from dealer registration to qualifying liquidity providers using proprietary capital.
The SEC's decision comes after the Senate blocked the CLARITY Act in a 49-50 procedural vote earlier this week. The exemption is seen as a step towards bringing U.S. capital markets 'into the digital age', according to SEC Chair Paul Atkins.
Tokenized shares must represent actual NMS stocks and provide holders with the same rights and privileges as conventional shares, including dividends, voting rights, and residual claims in a liquidation.