SEC Pushes Bipartisan Support for Tokenization Amid Innovation Exemption

SEC Director Jamie Selway is pushing for bipartisan support to modernize markets through digital assets. He argues that innovation without arbitrage, where tokenized assets are subject to the same rules as traditional stocks, should be a goal both parties can agree on.

The SEC's Innovation Exemption, issued in September 2026, provides temporary relief for venues trading tokenized NMS stocks, allowing them to operate without full exchange registration for five years. This exemption also enables AMM-style liquidity pools for tokenized stocks.

Selway believes that better coordination between the SEC and CFTC is crucial, particularly around swap reporting and portfolio margining. He also sees a connection between his tokenization framework and extending equity market trading beyond the current 9:30 AM to 4:00 PM Eastern window, potentially leveraging blockchain rails for round-the-clock markets.