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.
Executive summary
The SEC on September 17, 2026 issued an order granting temporary, conditional exemptive relief to Tokenized Securities Venues (TSVs) from the definition of 'exchange' in the Securities Exchange Act of 1934, allowing them to trade tokenized National Market System (NMS)…
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Source documents
https://www.sec.gov/newsroom/press-releases/2026-90-sec-issues-innovation-exemption-facilitate-trading-tokenized-nms-stock-request-commentRead by Regulus 15 Oct 2026 at 09:04 UTC
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