SEC Approves Temporary Exemption for Tokenized Stock Trading
- The SEC has granted a five-year temporary exemption for trading tokenized U.S. stocks on qualifying on-chain venues.
- Tokenized Securities Venues can use permissioned automated market makers and liquidity pools under the new “Innovation Exemption.”
- Venues must ensure tokenized shares provide the same rights as conventional stocks, with limits on symbols and trading volume.
- Smart contracts used in these systems must be auditable, public, and deployed on a public permissionless distributed ledger.
- Trading of tokenized stocks must halt if the underlying stock is halted on its primary exchange.
This SEC move marks a significant step towards integrating DeFi structures into traditional finance by allowing limited on-chain secondary trading of U.S.-listed shares while maintaining investor protections.
The exemption provides a controlled path for testing on-chain execution, potentially opening doors for crypto infrastructure companies to explore new market structures within regulatory boundaries. (Source)
