The U.S. Securities and Exchange Commission on Sept. 17, 2026, issued a temporary, conditional “Innovation Exemption” that lets Tokenized Securities Venues trade blockchain-based representations of National Market System stocks without registering as national securities exchanges, provided they meet ownership and investor-protection conditions.
In Exchange Act Release No. 34-106402, the Commission granted TSVs conditional relief from the Exchange Act’s “exchange” definition to trade tokenized NMS stock through permissioned automated market maker liquidity pools. A parallel conditional exemption covers certain liquidity providers that supply tokenized NMS stock to those pools with proprietary capital and might otherwise trip “dealer” registration. The relief is set to expire five years after publication in the Federal Register, and the order invites public comment on whether to modify or replace it.
The exemption is built around real ownership, not synthetic exposure. Tokenized NMS stock must confer the same rights and privileges as traditional shares of the same class, including dividends and voting. Tokens may be created by or for the issuer, or by an unaffiliated third party after notice; issuers can object, and venues must wait about 30 days after notice before trading—if the company objects in that window, the venue cannot list that tokenized stock. SEC materials exclude products that only offer synthetic exposure, such as certain tokenized linked securities or tokenized security-based swaps. CNBC reported the package also includes volume limits meant to dampen thin-market swings.
SEC Chair Paul Atkins cast the move as an interim on-chain experiment under existing authority—part of the agency’s Project Crypto—while stressing that durable rulemaking should follow.