SEC Approves Nasdaq Pilot To Trade Tokenized Stocks Alongside Traditional Shares

Under the approved structure, tokenized and traditional shares of the same stock will trade on the same order book, at the same price

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The U.S. Securities and Exchange Commission approved a proposal by Nasdaq on Wednesday to launch a pilot program allowing tokenized versions of stocks and other securities to trade alongside their traditional counterparts on the same exchange.

Nasdaq first submitted the proposal in September, seeking a rule change that would allow high-volume stocks to be traded in either standard or tokenized form through a pilot with the Depository Trust Company, a central market infrastructure firm. The SEC received feedback raising concerns around market surveillance and the risk of price divergence between tokenized and traditional versions, which Nasdaq addressed through a subsequent amendment.

Under the approved structure, tokenized and traditional shares of the same stock will trade on the same order book, at the same price, under the same ticker and identification number, and carry identical shareholder rights. Only "eligible participants" can take part in the pilot and may choose which form to trade.

The scope of eligible securities is limited to those listed in the Russell1000 Index, which tracks the 1,000 largest U.S.-listed companies by