SEC Gives Tokenized Stock Platforms Five-Year Regulatory Reprieve
The U.S. Securities and Exchange Commission (SEC) has granted a five-year exemption to platforms that facilitate trading in certain blockchain-based, or tokenized, stocks.
This temporary 'Innovation Exemption' allows qualifying Tokenized Securities Venues, or TSVs, to operate without being treated as traditional stock exchanges under certain provisions of federal securities law.
The agency also granted a five-year exemption from dealer registration requirements to certain liquidity providers participating in tokenized stock markets.
Tokenized stocks are digital representations of securities that can be traded on blockchain networks.
The SEC's order applies to certain tokenized National Market System stocks and permits trading through permissioned automated market makers and liquidity pools, subject to conditions designed to protect investors and market integrity.