[REVISION HISTORY]

SEC regulation of tokenized U.S. stock trading

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What changed

2026-09-20 03:17 UTC → 2026-09-20 17:24 UTC · added ~~removed~~

The U.S. Securities and Exchange Commission (SEC) has introduced a five-year ‘Innovation Exemption’ to facilitate the onchain trading of tokenized National Market System (NMS) stocks. This pilot program, designated as Exemptive Release No. 34-106402, allows qualifying Tokenized Securities Venues (TSVs) to operate without registering as traditional exchanges under Section 36(a)(1) of the Securities Exchange Act. Issued on September 17, 2026, the regulatory relief follows the U.S. Senate's rejection of the CLARITY Act (H.R. 3633). To maintain investor protection, the SEC mandates that tokenized assets must provide the same economic and legal rights as traditional shares, such as voting rights and dividend payments. The exemption specifically excludes synthetic tokens that only track price movements. ~~Additionally, companies whose shares are being~~ Furthermore, if trading in an underlying stock is halted on its primary exchange, trading for its tokenized ~~by third parties~~ counterpart must also cease. Operational limits have been established to manage risk: Tier 1 venues are ~~granted a 30-day window~~ restricted to ~~object.~~ 75 symbols or 0.25% of average daily volume, while Tier 2 venues can handle up to 250 symbols or 2.5% of volume. The exemption does not waive existing fraud regulations, OFAC sanctions, or registration requirements for primary offerings. SEC Commissioner Hester M. Peirce noted, “The innovation exemption has arrived.” The Commission intends to use this period, which runs through September 17, 2031, to observe the model while considering permanent rulemaking. A public comment process has been opened regarding potential modifications and future regulatory steps. Following the implementation of the exemption, the decentralized finance (DeFi) sector has seen significant growth. Tokenized stock trading has utilized permissioned automated market makers (AMMs) to facilitate 1:1 backed US stock trades. This activity has driven substantial gains for several DeFi tokens, including Arbitrum (ARB), Uniswap (UNI), Analysts from Goldman Sachs and ~~NEAR Protocol (NEAR). Uniswap has emerged~~ Citizens suggest that companies such as ~~a major venue, attracting approximately $82.8 million in~~ Coinbase, Robinhood, and Circle may benefit significantly from this new ~~deposits for tokenized stocks over a 30-day period, capturing 73% of stock token deposits on the Robinhood Chain.~~ on-chain equity infrastructure.

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