SEC Cracks Down on Stock Token Transparency

The US Securities and Exchange Commission (SEC) is seeking clearer disclosures for stock tokens. The proposal, which entered its formal comment period on September 4, 2026, with submissions due by November 3, 2026, aims to provide investors with more information about the parties involved in creating and trading these instruments.

Stock tokens typically involve four core parties: an issuer, a broker, a custodian, and a blockchain. The issuer creates the instrument and promises economic exposure to the share price without transferring direct ownership. This structure makes the issuer the investor's counterparty rather than the listed company, which can increase risk if the issuer fails.

The broker provides the account through which investors buy and hold the product, while custody adds another layer of protection by holding underlying assets and customer positions. The blockchain affects how the position works in practice, with transfers dependent on network availability and provider policies.

Tokenized stock activity is expanding, with weekly spot trading volume approaching USD 3 billion in early August, according to Grayscale Investments. Robinhood Chain, BNB Chain, and Solana accounted for most of this activity. The tokenized-stock market capitalization stands near USD 3 billion, compared to about USD 34.3 billion for tokenized funds.