The US Securities and Exchange Commission has introduced an innovation exemption that permits the limited trading of tokenized National Market System stocks on specific onchain venues. This temporary framework allows Tokenized Securities Venues to facilitate permissioned trading through automated market makers and liquidity pools.
To operate under this exemption, venues must adhere to strict transparency and recordkeeping standards. Operators are required to publish transaction data denominated in US dollars, which includes trade prices, timestamps, pool addresses, daily trading volumes, and end-of-day pool sizes. The regulator has also mandated the implementation of technology safeguards.
Commissioner Mark Uyeda stated that the framework includes specific limits on symbols and trading volumes to ensure control. The SEC intends to utilize the data gathered from these activities to evaluate onchain securities trading and develop future regulatory policies. The commission is currently soliciting public feedback, including case studies and data from live or test environments.
The development of this framework has been ongoing for several months. In February, SEC Chair Paul Atkins noted that the agency was exploring a temporary structure to enable limited trading of tokenized securities via automated market makers while working on long-term rules.
