The US Securities and Exchange Commission has introduced a five-year Innovation Exemption, allowing the trading of tokenized equities on blockchain-based platforms. This regulatory move follows the failure of the CLARITY Act in the Senate, enabling designated Tokenized Securities Venues to facilitate onchain trading without traditional exchange registration.
These new venues can list tokenized versions of stocks from the Russell 1000 index and specific ETFs. Digital assets must provide identical rights to traditional shares, including voting and dividends. Corporate issuers retain the authority to block the tokenization of their securities on these platforms.
Participants on these venues must adhere to verification, sanctions screening, and public reporting standards. Liquidity providers are exempt from standard dealer registration requirements. SEC Chairman Paul S. Atkins described the initiative as a step toward modernizing capital markets.
The framework builds on earlier 2026 rule changes approved for Nasdaq. The SEC is currently soliciting public commentary to inform future rulemaking. For institutional players, the shift to blockchain settlement aims to move from T+1 standards to near-instantaneous finality.
