SEC Grants Five-Year Exemption for Tokenized Securities Trading

The Securities and Exchange Commission (SEC) has announced a five-year 'Innovation Exemption' for qualifying Tokenized Securities Venues to trade certain tokenized National Market System (NMS) stocks through permissioned automated market makers (AMMs) and liquidity pools.

The exemption, which came into effect on September 17, allows eligible tokenized shares to provide holders with rights and privileges equivalent to the underlying traditional securities. This includes voting and dividend rights where applicable.

The framework also includes requirements covering smart-contract transparency, trading volumes, issuer objections, and coordinated trading halts. Eligible tokenized NMS stocks must provide holders with the same rights as the corresponding traditional shares.