SEC Creates 'Innovation Exemption' for Trading Tokenized Stocks
The US Securities and Exchange Commission has issued a temporary, five-year exemption allowing for the limited trading of tokenized NMS stocks on new venues and providing regulatory relief for certain liquidity providers.
On September 17, 2026, the US Securities and Exchange Commission established a temporary framework for trading tokenized securities. The five-year 'Innovation Exemption' permits certain National Market System (NMS) stocks to trade on new 'Tokenized Securities Venues' (TSVs) using automated market makers, without the TSVs having to register as national securities exchanges or alternative trading systems. The order also exempts qualifying liquidity providers on these platforms from broker-dealer registration requirements. This development is significant as it creates the first regulated sandbox for integrating distributed ledger technology with the US equities market, potentially enabling innovations like 24/7 trading and near-instant settlement. Corporate issuers must now consider policies for the potential tokenization of their stock by third parties, while financial and technology firms have a limited-time opportunity to build and test new business models with greater regulatory certainty. The SEC is soliciting public comment on the temporary rules, and market participants will be watching closely to see if the framework becomes permanent.