SEC Grants Five‑Year Exemption for Tokenized U.S. Stocks, Emphasizing Full Share Rights

The U.S. Securities and Exchange Commission has issued a five‑year exemptive order that allows tokenized versions of National Market System (NMS) stocks to be issued on blockchain platforms, provided each token conveys the full suite of rights attached to the underlying share.

Investor Rights Over Trading Speed

Bitget Wallet COO Alvin Kan emphasized that legal ownership and shareholder rights matter more to investors than 24‑hour trading or faster settlement. Under the exemption, a token must grant holders the same economic interest, dividend entitlement, voting power and liquidation claim as a traditional share. Tokens that only provide price exposure are excluded.

Control for Issuers and Distinction from Synthetic Products

Issuers can object to third‑party tokenization of their shares, giving listed companies a degree of control over how their securities appear on blockchain markets. The order therefore separates true tokenized stocks—direct or beneficial interests in regulated shares—from contracts that merely track a stock’s price.

Practical Benefits and Limitations

• Potential for self‑custody and fractional ownership.
• Continuous, near‑instant settlement could reduce the lag between trade execution and ownership transfer.
• Round‑the‑clock trading may alleviate exchange‑hour constraints.

Kan cautioned that these advantages depend on the underlying market structure. If access remains heavily permissioned, liquidity stays thin, or multiple intermediaries are required, the user experience may change little despite blockchain integration.

Regulatory Scope and Timeline

The exemption applies to a limited set of symbols and trading volumes, is subject to modification, and expires five years after publication. It is intended to give institutions—banks, brokerages, trading venues and blockchain providers—operational clarity for pilot programs while the SEC gathers data for future rulemaking.

Context Within Ongoing Legislation

The order was released shortly after the Senate failed to advance the Digital Asset Market Clarity Act (CLARITY Act), which sought to create a broader federal framework for digital assets. The Senate’s procedural vote left the SEC’s existing authority over securities unchanged, allowing it to proceed with the tokenized‑stock exemption without awaiting congressional action.