The U.S. Securities and Exchange Commission is advancing an "innovation exemption" for tokenized listed securities, a step that Chair Paul Atkins has described as a way to let market participants begin facilitating compliant onchain trading before the agency finishes longer-term rulemaking. Bloomberg reported on Aug. 11 that the measure could pave the way for 24/7 trading of stock tokens on blockchains.
Public comments from Atkins suggest the measure has not yet been released. In remarks delivered in April, he said the SEC was "on the cusp" of publishing the framework. In May, he referred to it as a "forthcoming innovation exemption for tokenized listed securities." Both speeches included disclaimers saying he was expressing his own views rather than those of the Commission or other commissioners.
Those speeches did not identify the exemption's legal form, when it would take effect, what binding conditions would apply, or which specific requirements it would change. The SEC's Friday meeting agenda also does not include the innovation exemption. The only listed item is whether the agency should issue a proposing release for a new rulemaking on "a tailored offering regime for certain investment contracts involving crypto assets," a separate initiative focused on crypto offerings.
What the framework is meant to address
In a joint staff statement dated Jan. 28, the SEC's Divisions of Corporation Finance, Investment Management, and Trading and Markets said the format of a security and the method used to keep records do not change how federal securities laws apply. Every offer and sale still has to be registered unless an exemption is available.
Commissioner Hester Peirce made the same point in an earlier statement, writing that "Tokenized securities are still securities." She said the same legal requirements apply to both onchain and offchain versions, including restrictions that can keep retail investors from trading some synthetic products away from a national securities exchange.
For trading venues, Atkins has only described the intended change at a high level. He said the framework would allow market participants to start facilitating tokenized-securities trading onchain "in a compliant fashion" while the Commission works on longer-term rules. Bloomberg separately reported that the exemption could help enable continuous stock-token trading. The April and May speeches, however, did not say which platforms or products would qualify.
Structure matters for issuers and investors
The structure of the product is also a central issue for stock issuers. The Jan. 28 joint staff statement drew a distinction between shares tokenized by a company or its agent and products created by an unaffiliated third party.
According to that statement, third-party products may represent a custodial interest in underlying shares or offer synthetic exposure instead. They may also fail to give holders voting rights, information rights, or other shareholder rights. Some of those products can expose buyers to the bankruptcy risk of the third party.
SIFMA calls for limits and formal notice-and-comment
Wall Street trade group SIFMA has urged the SEC to put any innovation-exemption framework through notice and comment. It also asked for investor limits, transaction caps, duration limits, and clearly defined covered activities.
SIFMA warned that broad relief could lead to fragmented liquidity, inconsistent pricing, and uneven safeguards between conventional markets and tokenized ones. Those points reflect the guardrails requested by SIFMA, not terms that the SEC has announced.
Friday's SEC agenda covers a different crypto item
The matter scheduled for Friday is whether the Commission should issue a proposing release for a separate crypto offering regime. The published agenda does not include the tokenized-securities exemption.
For now, the public record shows that the SEC is moving forward with the idea of an innovation exemption tied to tokenized listed securities, while the formal text, scope, and implementation terms remain undisclosed.