SEC's Peirce Urges Asset Managers to Engage on Tokenization and ETF Plans

SEC Commissioner Hester Peirce said on March 17 that regulators encourage asset managers to approach the agency as they develop tokenized financial instruments and new ETF structures, The Block reports. Peirce emphasized firms should speak directly with the SEC about their plans so regulators can work with them on market testing, adding more companies have recently come forward with tokenization proposals as attitudes toward blockchain technology have evolved. On leveraged ETFs, she noted the SEC's role is to ensure offerings meet statutory leverage caps and disclosure rules rather than judge product quality, while issuers can suggest structures above typical thresholds if they show compliance with securities law. Peirce also disclosed SEC staff are studying a narrowly tailored innovation exemption to permit limited trading of certain tokenized securities within the current regulatory regime.