SEC Authorizes Trading of Tokenized Stocks via Innovation Exemptions
The U.S. Securities and Exchange Commission authorized trading venues to offer tokenized stocks through two five-year innovation exemptions requiring parity in dividend and voting rights.
The United States Securities and Exchange Commission has authorized trading venues to offer tokenized stocks within the United States through two five-year innovation exemptions. To qualify for trading under this regulatory framework, tokenized stocks must provide holders with the same voting and dividend rights as traditional shares.
The order includes a safeguard allowing issuing companies to block the offering of third-party tokenized stocks if they object within a 30-day notice period. Proponents of the move claim blockchain-based stocks will enable instant settlement, lower costs, and 24/7 trading.
Industry reactions are divided. Citadel Securities warned that the exemptions introduce risks of cyber threats, price manipulation, and excessive volatility, arguing for a formal notice-and-comment process to ensure investor protection. Adam Aron, CEO of AMC Entertainment, criticized the framework for bypassing traditional regulations and potentially interfering with corporate capital raising. Conversely, Robinhood CEO Vladimir Tenev defended the shift, stating that companies cannot control financial products created around their public shares. Robinhood currently offers synthetic versions of U.S. stocks and ETFs to customers outside the United States.
