SEC Approves Limited Onchain Trading for Tokenized Stocks
- On September 17, the SEC approved a temporary “Innovation Exemption” for trading tokenized NMS stocks onchain.
- The exemption allows tokenized stocks to trade through automated market makers and liquidity pools, commonly used in DeFi.
- Qualifying Tokenized Securities Venues (TSVs) receive temporary relief from being classified as an “exchange” under the Securities Exchange Act of 1934.
- The SEC requires TSVs to adhere to conditions including public notices, transaction transparency, and recordkeeping.
- U.S. dollar-denominated transaction data must be publicly available at regular intervals, with end-of-day pool size and daily volume disclosures.
The SEC’s approval allows a controlled experiment in tokenized stock trading using mechanisms from decentralized finance, with strict conditions for transparency and data collection. This approach aims to gather real-world data before establishing permanent regulations.
By monitoring these tokenized markets closely, the SEC seeks to understand their operations better before drafting long-term rules that could shape future securities trading frameworks. (Source)
