SEC Approves Temporary On‑Chain Trading of Tokenized Stocks

The U.S. Securities and Exchange Commission issued a temporary “Innovation Exemption” on September 17, allowing a limited set of tokenized National Market System (NMS) stocks to be traded on‑chain via automated market makers (AMMs) and liquidity pools.

Scope of the Exemption

Qualifying Tokenized Securities Venues (TSVs) receive relief from classification as a securities exchange under the Securities Exchange Act of 1934, enabling them to operate AMMs and liquidity pools for tokenized stocks. The exemption applies only to a defined list of symbols and includes volume caps tied to limit‑up/limit‑down tiers.

Operational Requirements

TSVs must comply with a set of conditions, including public notice, transaction transparency, coordinated trading stoppages, record‑keeping, and technology safeguards. Detailed transaction data—price, size, time, and pool address—must be published at regular intervals, along with end‑of‑day pool size and daily volume.

Liquidity Provider Relief

The exemption also extends tailored relief to liquidity providers that contribute capital to these pools, provided they meet disclosure and record‑keeping standards. The SEC cited historical examples such as money‑market funds, index funds, and ETFs that previously benefited from exemptive authority.

Regulatory Intent

The SEC plans to use the data collected from this experiment to inform future rulemaking for tokenized real‑world assets. Public feedback, case studies, and incident analyses are being solicited to shape permanent regulations.

Next Steps

While the exemption is temporary, the SEC’s approach is described as a “responsible experiment” aimed at translating existing investor protections to new on‑chain contexts.