SEC Clears Tokenized US Stocks Trading Under Tight Conditions
The US Securities and Exchange Commission (SEC) has cleared trading in tokenized US stocks for five years, but only under tight conditions. On September 17, 2026, the SEC issued an order with number 34-106402, releasing certain trading venues from registering as exchanges. The exemption is time-limited and will lapse on September 17, 2031, unless a permanent rule is created.
The two exemptions involved are: first, platforms concerned are no longer classified as an exchange under the US Securities Exchange Act of 1934; second, market participants providing capital in these platforms' liquidity pools do not have to register as securities dealers. The SEC has combined this decision with a request for comment, gathering feedback on what a permanent arrangement should look like.
A new category of market participant, the Tokenized Securities Venue (TSV), has been created by the order. A TSV brings together buyers and sellers of tokenized US stocks through automated market maker (AMM) liquidity pools and determines access. The smart contracts must be publicly visible and auditable and run on a public, permissionless blockchain.
The exemption is capped by volume in two tiers: Tier 1 covers stocks from the S&P 500 and the Russell 1000 with a limit of 75 symbols and 0.25 percent of daily volume; Tier 2 covers remaining US stocks with a maximum of 250 symbols at 2.5 percent of average daily volume.