SEC Issues Landmark Exemption to Allow Tokenized Stocks Trading in the US
The US Securities and Exchange Commission (SEC) issues landmark exemption allowing the trading of tokenized stocks. BUT there is a caveat and an unresolved question.
Two days after the CLARITY Act collapsed in US, the SEC steps in to fill the gap with exemptions for tokenized stocks to trade on exchange venues.
It is also offering liquidity providers in tokenized stocks a five-year exemption from dealer registration requirements.
The tokens permitted by the SEC exemptions will carry the same shareholder rights granted to investors in traditional stocks, including dividend payouts and proxy votes.
➡️ The caveat
Before a venue begins trading a stock tokenized by a third party, it must give the issuer 30 days’ notice.
We have already seen high-profile clashes between companies and platforms offering tokenized or synthetic exposure to their equity - most notably involving AMC, OpenAI, Anthropic and Robinhood's CEO.
Issuers do not want unaffiliated platforms creating products that use their names while offering investors something legally different from their actual shares.
➡️ The unanswer question
The SEC framework contemplates tokens carrying dividend and voting rights.
But some third-party synthetic products already replicate those benefits.
Through arrangements with infrastructure providers such as Broadridge, platforms may pass through the economic value of dividends and facilitate proxy voting.
Does that make the tokenized product eligible?
Or does the exemption require the token holder to possess the underlying legal shareholder rights not merely receive an economic and technological approximation of them?
➡️ What is clear
The race to build and capture the next stage of equities infrastructure is well under way.
Nasdaq and NYSE have already been preparing tokenized-equity infrastructure, supported by DTC’s emerging tokenization and settlement capabilities and SEC's approval.
Which will scale first: the DTC upgrade or the third-party synthetics? That is the next big question for the US equities market.
Explore more intelligence on:
✅ Want to understand what matters next. Join Strategic Edge for exclusive research, strategic analysis, and commercialization insights shaping the future of tokenization and digital assets.
Comments