SEC Opens Regulatory Path for On-Chain Trading of Tokenized U.S. Stocks
Summary
- The U.S. Securities and Exchange Commission has opened a regulatory path for tokenized stocks to trade on-chain.
- The SEC approved a five-year temporary conditional innovation exemption for tokenized securities exchanges, allowing them to trade tokenized shares of U.S.-listed companies in a permissioned on-chain environment if they meet certain requirements.
- Eligible tokens must provide the same rights as traditional shares, including dividends and voting rights, and issuers can object to the tokenized trading of their own stock.
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The U.S. Securities and Exchange Commission has opened a regulatory path for tokenized stocks to trade on-chain within the U.S. securities law framework.
Cointelegraph reported on September 23 that the SEC on September 17 approved an "innovation exemption," a temporary conditional relief measure for tokenized securities exchanges. Under the move, exchanges that meet certain requirements can trade tokenized shares of U.S.-listed companies in a permissioned on-chain environment.
The measure temporarily exempts those venues from the definition of an "exchange" under the Securities Exchange Act. It also grants certain liquidity providers relief from dealer-related rules. The exemption lasts five years.
Eligible tokens must provide the same rights as the underlying shares, including dividends and voting rights. Issuers can also object to the tokenized trading of their own stock.
JH Kim
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