TLDR
- The SEC has launched a five-year “Innovation Exemption” allowing regulated platforms to trade tokenized U.S. stocks on public blockchains without registering as national exchanges.
- Platforms operating under the exemption, called Tokenized Securities Venues, can use smart contracts and liquidity pools instead of traditional order books.
- Stock issuers have veto power, with 30 days notice required before a third party can tokenize their shares.
- Trading volumes are capped, with the most liquid stocks limited to 0.25% of average daily volume per venue.
- The SEC is also exploring 24/7 trading hours, with tokenization seen as a potential enabler of around-the-clock markets.
The SEC released its innovation exemption on Thursday, September 17, giving regulated platforms a five-year window to trade tokenized U.S. stocks on public blockchains. The move came one day after Chair Paul Atkins warned the agency would act within its existing authority after the Senate failed to advance the Clarity Act crypto legislation.
🚨 TODAY: The SEC issued an order granting temporary, conditional exemptive relief to Tokenized Securities Venues from the definition of “exchange” in the Exchange Act to trade tokenized NMS stock using innovative permissioned automated market makers and liquidity pools. pic.twitter.com/VDi7Oty2d9
— U.S. Securities and Exchange Commission (@SECGov) September 17, 2026
The exemption takes effect immediately and allows firms to test blockchain-based stock trading without registering as a full national securities exchange.
Platforms operating under the exemption are called Tokenized Securities Venues, or TSVs. They can use automated market makers and liquidity pools, tools common in decentralized finance, instead of the traditional order book model used by exchanges like the New York Stock Exchange.
What Changes for Investors
Investors could still own real shares with the same voting rights and dividends as traditional stock. The token must carry the same legal rights as the underlying share. If a stock trading halt is triggered on its primary market, the tokenized version must stop trading too.
Synthetic products that only track a stock’s price do not qualify for the exemption. This is a key distinction, as some overseas products marketed as tokenized stocks are actually derivatives with no real ownership attached.
The exemption also does not allow leverage or lending on TSV platforms.
Volume caps are in place to keep the experiment contained. For the most liquid stocks, each venue can handle no more than 0.25% of average daily trading volume across up to 75 names. A second tier allows up to 250 names at 2.5% of daily volume.
What Changes for Companies
A third party can propose putting a company’s shares on a blockchain without the company doing it itself. However, the company must be given 30 days notice and has the right to object. An objection can be as simple as the issuer saying it does not want its securities tokenized on that venue.
This follows a public dispute earlier in September when AMC Entertainment’s CEO criticized Robinhood for offering AMC-linked stock tokens without company involvement.
The SEC says the blockchain infrastructure must be public and auditable, but access to the trading venue itself remains permissioned. Retail investors, institutions, and broker-dealers can participate if they meet the venue’s access requirements.
Certain liquidity providers will also receive conditional relief from dealer registration requirements, allowing them to supply assets to the liquidity pools.
Securitize CEO Carlos Domingo said he expects the framework to speed up the development of native tokenized securities and create multiple onchain liquidity venues.
On the same morning, the SEC held a roundtable on expanding U.S. market hours to 24/7 trading. Atkins cited tokenization as a tool that could help make that possible by enabling real-time inventory management and reducing settlement failures.
The exemption is also described as a live experiment. The SEC plans to use findings from the five-year window to inform future rulemaking and potentially new legislation.
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