SEC grants five-year 'Innovation Exemption' for onchain trading of tokenized NMS stock

The SEC has carved tokenized-stock trading venues out of the Exchange Act's 'exchange' definition for five years, letting them operate permissioned automated market makers while the Commission weighs permanent rules. This segment covers what the conditional relief permits, the six conditions attached, the parallel 'dealer' exemption for liquidity providers, and the comment window now open.

• TSVs are temporarily exempted from the Exchange Act 'exchange' definition to trade tokenized NMS stock via permissioned AMM liquidity pools, subject to symbol and volume limits.
• Conditions include rights parity with traditional stock, issuer notice-and-objection for third-party tokenization, auditable public smart contracts on a permissionless ledger, and halts mirroring the primary exchange.
• A parallel conditional exemption from the 'dealer' definition covers proprietary-capital liquidity providers; both exemptions expire five years after publication.