SEC Order Creates Five-Year Path for Tokenized NMS Stock Trading

The SEC has issued an order and request for comment (Release No. 34-106402) creating a time-limited, five-year framework under which tokenized national market system stocks may trade in the secondary market through permissioned automated market makers and liquidity pools. Because essentially every stock listed on the NYSE or Nasdaq is an NMS stock, the order is potentially applicable to the equity of most major U.S. public companies, extending the framework well beyond crypto-native issuers. For corporate counsel, the open questions are practical: which tokens and venues qualify, what disclosure, recordkeeping, and settlement arrangements are required, and how the regime interacts with existing shareholder agreements, transfer restrictions, and securities-lending or collateral workflows. The release is open to comment, so eligibility criteria, conditions, and the final shape of the exemption may still change, and the source here is a single firm's client alert rather than the order text. Counsel advising on tokenization, digital-asset custody, or market access should review the underlying release and monitor the comment docket and any follow-up guidance before structuring a program around it.