SEC Grants Tokenized Stock Trading Exemption
The SEC’s Innovation Exemption opens the door for tokenized U.S. equities to trade on blockchain‑based venues, but only if issuers grant a 30‑day objection right and the exchange meets strict volume and symbol limits.
On September 17 2026 the SEC issued its Innovation Exemption order, granting a five‑year experimental exemption that allows tokenized forms of S‑&P 500, Russell 1000, and other U.S. listed securities to trade on Tokenized Securities Venues (TSVs) operated by U.S. persons. The exemption requires TSVs to provide issuers with written notice and an opportunity to object within 30 days before trading the issuer’s tokenized shares. TSVs must limit the number of symbols and the volume of each tokenized security, provide equivalent shareholder rights, and publish detailed operational notices and trade data. Although still subject to SEC comment, the order signals a significant pivot toward blockchain‑enabled secondary markets for equities. Issuers and advisors should immediately review their investor‑relations processes to ensure timely notice receipt, consider potential risks of price divergence or voting misalignments, and assess whether to adopt overarching policies for tokenized trading on future quarterly filings.