SEC Greenlights Five-Year Experiment in Tokenized Stock Trading
The U.S. Securities and Exchange Commission (SEC) has issued a five-year exemption for tokenized stock trading venues, allowing them to trade tokenized National Market System stocks on-chain via permissioned automated market makers and liquidity pools.
The exemption, which will last until publication in five years unless the regulatory framework changes, is an experiment aimed at bringing public-company shares on-chain. Tokenized shares made available through a venue must provide holders the same rights and privileges as the corresponding conventional stock.
The venues also face limits on symbols and trading volume, while smart contracts used in the system must be auditable, public, and deployed on a public permissionless distributed ledger. If trading in the underlying stock is halted on its primary exchange, trading in the tokenized version must stop too.