SEC grants 5-year exemption for tokenized NMS stock trading via AMMs

The Securities and Exchange Commission (SEC) has announced a five-year “Innovation Exemption,” allowing certain Tokenized Securities Venues (TSVs) to facilitate trading of tokenized National Market System (NMS) stocks through permissioned automated market makers (AMMs) and liquidity pools. This decision introduces a conditional regulatory pathway for blockchain-based trading of traditional U.S. equities within a defined framework.

SEC introduces limited exemption after CLARITY Act stalls

The exemption was granted just days after the Senate failed to move forward the CLARITY Act, which aimed to establish a broader cryptocurrency regulatory framework. The procedural vote on September 15 fell short of the 60-vote threshold, effectively postponing the bill during the Congressional recess.

Reacting to this legislative impasse, the SEC moved forward by leveraging its existing authority to focus on a narrower approach. Instead of comprehensive new rules, the agency has established a limited pilot allowing qualifying crypto platforms to participate in trading certain tokenized securities, rather than covering the full spectrum of digital assets.

SEC Chairman Paul Atkins described the policy as an initiative intended to “bring America’s capital markets into the digital age” by enabling tokenized NMS stock trading in a strictly permissioned environment.