SEC Delays Tokenized Stock Exemption Over Industry Concerns: Report

The US Securities and Exchange Commission has postponed the release of its proposed "innovation exemption" for tokenized stock trading after receiving concerns from stock exchange operators and other market participants about how the framework would be implemented, Bloomberg reported on Friday.

SEC staffers had already reviewed a draft of the proposal, which was expected to be released during that week, according to sources cited by Bloomberg. The agency has taken in feedback from hundreds of participants but has not altered the substance of its proposal.

Under the framework, platforms offering tokenized stocks would be required to guarantee investors the same rights as traditional shareholders, including voting rights and dividends. Market participants raised concerns about the possibility of unauthorized third parties issuing tokens without the consent of public companies, and about how ownership would be verified on semi-pseudonymous

networks.

The delay follows remarks by SEC Commissioner Hester Peirce on Thursday, when she said the exemption would be narrow in scope and cover only digital representations of equity securities comparable to what investors can access in the secondary market today. In January, the SEC distinguished between custodial tokenized securities, which carry full shareholder rights and are held by regulated intermediaries, and synthetic versions that offer price exposure without actual ownership of the underlying shares.