SEC Temporarily Allows Onchain Trading of Tokenized US Stocks
The US Securities and Exchange Commission (SEC) has approved a temporary exemption for onchain venues to trade tokenized shares of US stocks. Commissioner Mark Uyeda announced this development in a statement dated September 17.
The exemption, referred to as the Innovation Exemption, will allow Tokenized Securities Venues (TSVs) to operate while the Commission studies their operations and considers how securities regulation should apply to blockchain-based markets.
The SEC believes that tokenization could modernize various aspects of stock trading, such as issuance, trading, transfers, settlement, and ownership records. This approach may also reduce costs, enhance transparency, and increase liquidity.
Qualifying venues can receive temporary relief when they provide permissioned trading in tokenized US stocks through innovative structures like automated market makers and liquidity pools. However, this relief is conditional and requires TSVs to comply with specific requirements related to public notice, transaction transparency, trading stoppages, recordkeeping, and technology safeguards.