SEC Grants Five-Year Exemption for Tokenized Securities Venues to Trade NMS Stocks

The U.S. Securities and Exchange Commission (SEC) has issued a five-year temporary exemption for Tokenized Securities Venues, allowing them to trade tokenized National Market System (NMS) stocks through permissioned automated market makers (AMM) and liquidity pools.

This relief is conditional, with several key requirements including that tokenized stocks must give holders the same rights as underlying traditional shares, including dividends and voting. Issuers whose stock is tokenized by an unaffiliated third party must be given notice and a chance to object, and trading on the venue must halt whenever the underlying stock is halted on its primary listing exchange.

The exemption stops short of granting a general license for all forms of dealing activity, with liquidity providers who supply proprietary capital to eligible pools receiving conditional relief from dealer status. The exemptions are scheduled to run for five years, from September 17, 2026, to September 17, 2031.

This development has significant implications for networks like the XRP Ledger (XRPL), which has been running a native AMM integrated into its permissioned decentralized-exchange infrastructure since early 2024. While the SEC order does not name XRPL or specifically approve XRP, it shines a light on networks with mature AMM and DEX infrastructure.