SEC lays out four requirements for onchain trading of tokenized NMS stocks, bars synthetic versions
AI Market Summary
The SEC approved a temporary "innovation exemption" enabling conditional onchain trading of certain tokenized U.S. NMS stocks, while explicitly banning synthetic tokenized equities. The framework restricts venues to U.S. entities, limits access to qualified participants, preserves full investor rights (dividends/votes), and allows issuers to block listings; antifraud rules remain. This clarifies near-term compliance boundaries for U.S.-linked tokenization and brokerage/crypto-market infrastructure.
Impact level
● High
Affected assets
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AI Insight · NCSKCOIN2USD/USDTAI Insight
● Neutral
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Odaily Planet Daily reports that SEC Chairman Paul S. Atkins said the agency has approved an "innovation exemption" that provides a temporary, conditional regulatory carve-out for the onchain trading of certain tokenized NMS stocks.
Under the exemption, qualifying tokenized securities trading venues (TSVs) will not be treated as an "exchange" under the Securities Exchange Act, and qualifying liquidity providers will not be treated as "dealers."
Atkins said the exemption comes with four core conditions:
1) The TSV must be a U.S. entity and comply with economic and trade sanctions administered by the U.S. Office of Foreign Assets Control (OFAC).
2) The TSV must implement a permissioned access regime, limiting trading in tokenized NMS stocks to qualified participants.
3) Synthetic tokenized stocks are prohibited. Tokenized shares must be issued by the underlying stock issuer or by an unaffiliated third party, and holders must receive the same rights as traditional securities, including dividends and voting rights.
4) Issuers must have the ability to object to and block trading of their securities on a TSV. Federal securities law antifraud and antimanipulation provisions will continue to apply in full to the relevant securities activities.
