SEC grants five-year exemption for tokenised US stocks
The SEC's Innovation Exemption lets qualified venues trade tokenised NMS stocks via permissioned AMM pools for five years, days after the Clarity Act stalled.
The US Securities and Exchange Commission has granted a five‑year exemption to Tokenized Securities Venues, allowing them to trade tokenized US stocks onchain through permissioned AMM liquidity pools. Chairman Paul S. Atkins framed the decision as a major step toward modernizing America’s capital markets, saying the agency is using its statutory authority to enable onchain trading of certain tokenized shares via the “Innovation Exemption.”
Regulatory Framework
The order, issued on September 17, 2026, lets qualified venues operate without registering as a traditional exchange, provided their smart contracts are public, auditable and run on a public, permissionless distributed ledger while participants remain permissioned. Liquidity providers that supply tokenized stock with proprietary capital receive conditional relief from the dealer definition under Exchange Act section 3(a)(5).
Conditions and Limits
The exemption carries strict requirements. Tokenized shares must confer the same rights as their conventional counterparts, including dividend payments and voting privileges. Tokens that merely mimic price movements—synthetic or derivative forms—are expressly excluded. Venues must adhere to caps on the number of symbols and trading volume, pause tokenized trading whenever the underlying security is halted on its primary exchange, and publish transaction data in US dollars, detailing prices, sizes and daily volumes.
Market Impact
Citi analysts project that tokenized assets could expand to a $5.5 trillion market by 2030. Both Nasdaq and the New York Stock Exchange are already examining tokenized stock offerings. Because entry requires only a notice to the SEC rather than a formal designation, the new framework lowers barriers for established exchanges and newer crypto‑native platforms alike to compete for this emerging lane during the five‑year window.
Legislative Context
The SEC’s move follows the Senate’s failure on September 15, 2026, to pass the Digital Asset Market Clarity Act, falling short of the 60 votes needed for approval. As a result, the exemption rests on agency authority instead of statutory law. Atkins stressed that durable rulemaking must follow the exemption to keep onchain markets viable, and the SEC has opened a public comment period on possible adjustments while holding a roundtable on 24‑hour trading the same day.
Outlook
The five‑year conditional exemption represents a significant regulatory shift, offering a pathway for tokenized securities to enter mainstream markets while imposing safeguards to protect investors and preserve market integrity. As the sector moves toward the projected multi‑trillion‑dollar valuation, regulators will need to balance innovation with oversight to ensure that onchain trading becomes a sustainable component of America’s financial ecosystem.
Source: forexcrunch.com · 2026-09-19