SEC Weighs Giving Companies Right to Challenge Third-Party Stock Token Listings

The US Securities and Exchange Commission (SEC) is proposing an 'Innovation Exemption' framework that could allow companies to challenge listings of tokenized shares issued by third parties without their consent.

The SEC had planned to unveil the proposal in May but postponed it to review additional feedback from market participants, including stock exchanges and listed companies.

At the center of the debate is whether third parties should be allowed to tokenize and trade shares of a specific company without that company's approval or involvement.

The SEC is also considering limiting tokenized securities trading platforms to US entities and adding anti-money laundering (AML) requirements to prevent tokenized stocks issued overseas from being exploited through regulatory gaps.