SEC issues temporary Innovation Exemption for tokenized NMS stocks

The SEC just gave tokenized stocks a formal on-ramp into the US equity market. On September 17, the agency issued a temporary “Innovation Exemption” granting five years of exemptive relief to Tokenized Securities Venues, allowing them to execute trades of tokenized National Market System stocks through permissioned automated market maker liquidity pools on public blockchains. In plain terms: qualified platforms can now match buyers and sellers of real, rights-bearing stock tokens on open blockchain rails, without being classified as exchanges under the Securities Exchange Act of 1934. What the exemption actually does The new framework carves out a narrow but meaningful lane. Tokenized Securities Venues, or TSVs, can operate permissioned AMM liquidity pools on public, permissionless blockchains. The key word is “permissioned”: while the underlying chain is open, only vetted participants can provide liquidity or trade. Smart contracts must be auditable, and public transaction data, including price, size, time, and volume statistics, must be released on a regular basis. The tokens themselves must confer the exact same shareholder rights as their traditional counterparts. Dividends, vo...