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SEC prepares rules that could open door to tokenized US stock trading
The regulator is preparing a tailored regime for certain crypto investment contracts alongside an exemption that could expand trading of tokenized US stocks.
The Securities and Exchange Commission is preparing two major crypto initiatives that could expand digital asset activity in the US as broader market structure legislation remains stalled in Congress.
The agency said it will hold an open meeting Friday to consider creating a tailored offering regime for certain investment contracts involving crypto assets.
The SEC is also preparing to release its innovation exemption for tokenized securities, according to a Bloomberg.
Details could be unveiled as soon as Friday, though the proposal remains under development and could still change.
The exemption could allow digital versions of securities to trade through blockchain based platforms and potentially open the door to around the clock trading of tokenized US stocks.
The SEC had initially planned to unveil the framework in May but delayed the proposal after receiving feedback from stock exchanges, public companies, and other market participants.
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One concern centered on third party tokens that could represent public company shares without the company’s backing or consent.
The revised proposal could allow companies to object when a third party seeks to list a tokenized version of their stock, according to people familiar with the plans.
The SEC is also expected to strengthen controls around overseas trading and money laundering risks. Potential measures include requiring platforms that trade the tokens to operate as US entities.
The regulatory push comes as Congress struggles to advance the Clarity Act, a broader crypto market structure bill.
Senate Majority Leader John Thune has moved to set up a procedural vote when lawmakers return in mid September after the legislation stalled before the August recess.
The SEC and Commodity Futures Trading Commission have continued advancing crypto related rules while Congress works on legislation, though analysts have warned that agency guidance may provide less durable regulatory certainty than laws passed by Congress.