The U.S. Securities and Exchange Commission has approved a temporary, conditional Innovation Exemption for limited trading in tokenized stocks in an onchain environment, Commissioner Mark Uyeda announced. The exemption allows Tokenized Securities Venues to facilitate trading in eligible stocks through automated market makers and liquidity pools without automatically being classified as exchanges under the Exchange Act.

The measure applies to stocks included in the National Market System. It is temporary and experimental rather than a full waiver of SEC requirements.

Conditions and trading limits

Venues using the exemption must publish a notice, provide transaction transparency, maintain records, coordinate trading halts and comply with technology security requirements.

The SEC has also limited the experiment by the number of available tickers and trading volumes. Venues must regularly publish transaction data in dollar terms, including prices, trade sizes, execution times, pool addresses, end-of-day pool sizes and daily turnover.

Separate relief is available for liquidity providers that use their own capital. Those providers must also meet disclosure and data-retention requirements.

Data to inform permanent rules

According to Uyeda, the initiative is intended to let the SEC observe how new trading models operate and collect data before developing long-term regulations.

“Technological innovation often outpaces rulebooks,” the commissioner noted.

Uyeda said regulation should remain technologically neutral and account for the characteristics of onchain infrastructure while preserving investor protection and market integrity.

The SEC has requested feedback from market participants on the initiative’s parameters. It expects to receive data, case studies and information about incidents in both real-world and test environments.

Earlier tokenized-securities measures

The decision continues the SEC’s effort to integrate tokenized securities into the U.S. market. In March 2026, the commission authorized Nasdaq to trade securities in tokenized form, integrating the assets into existing exchange infrastructure and allowing them to trade alongside traditional stocks.

In August, the SEC also proposed the Regulation Crypto Assets package. The proposal would establish a separate regime for certain investment contracts involving crypto assets and provide two exemptions from the standard offering-registration process.

Source: Incrypted