SEC Lowers Barriers for Tokenized Stock Trading
The US Securities and Exchange Commission (SEC) has eased regulations to pave the way for full-fledged trading of tokenized stocks. Tokenized stocks are traditional shares implemented as digital tokens on a blockchain, allowing them to be traded 24/7.
The SEC announced that it will exempt qualifying tokenized stock trading platforms from certain regulations applicable to traditional securities exchanges for five years. This move is expected to expand the tokenized stock market in the US and accelerate 24-hour trading of equities.
Under the new measure, tokenized stocks traded must carry the same shareholder rights as conventional shares, such as dividends and voting rights. For example, if Apple stock is tokenized, it must be a token that holds the rights granted to Apple shares, including dividends and voting rights, rather than simply tracking the movement of Apple's stock price.
The SEC attached conditions to the regulatory exemption, including trading volume caps, trading transparency, and record-keeping requirements. Companies can also refuse to have their shares tokenized, and if a third party wishes to tokenize a specific company's shares, it must notify the company 30 days in advance.