SEC Gives Trading Platforms Five-Year Pass on Tokenized Stock Trading
The Securities and Exchange Commission (SEC) has issued an 'Innovation Exemption' that allows trading platforms to trade tokenized stocks for five years without registering as exchanges, sidestepping Congress after its own crypto bill died in the Senate. The exemption is based on the SEC's statutory authority and does not require new legislation or formal rulemaking.
The order was issued by Chair Paul Atkins, who framed it as a step to 'bring America's capital markets into the digital age' by letting certain stocks trade on-chain. Commissioner Mark Uyeda also backed the move in a separate statement. The timing of the order is significant, as it came two days after the CLARITY Act, the crypto industry's biggest push for market-structure clarity, failed to advance in the Senate.
The exemption has some conditions: trading is capped on the number of symbols and volume each venue can handle while the program runs. Holders of tokenized shares must have the same rights as anyone holding the stock the old-fashioned way. Synthetic tokens are excluded entirely, and companies can block their shares from being tokenized.