SEC Opens Door to Tokenized Stocks as First Venue Plans Near

Key Insights:

• Taylor Lindman expects the first tokenized stocks venue notices to arrive next quarter.
• Issuers have 30 days to object to third-party tokenized stocks trading on a venue.
• The SEC’s five-year exemption sets trading caps and requires responsible operators.

Tokenized stocks could move closer to U.S. trading as firms prepare notices under the Securities and Exchange Commission’s Innovation Exemption.

Taylor Lindman, the chief counsel of the SEC Crypto Task Force, expects the first notices to be issued next quarter. Those filings would identify prospective operators and describe their plans before the market begins taking shape.

Lindman outlined that schedule during a Crypto In America interview with SEC Commissioner Hester Peirce. The five-year conditional exemption already applies, although he expects firms to need time before publishing notices.

Tokenized Stocks Face Notice and Issuer Requirements

Under the exemption, eligible venues can provide permissioned trading through automated market makers and liquidity pools on public, permissionless blockchains.

The framework covers tokenized versions of U.S.-listed stocks and requires operators to publish notices describing their activities. They must then notify the SEC within one business day of publication.