US SEC Approves Innovation Exemption for Tokenized NMS Stocks

The US Securities and Exchange Commission (SEC) has approved a temporary, conditional Innovation Exemption allowing tokenized National Market System (NMS) stocks to trade on specific on-chain venues known as Tokenized Securities Trading Venues (TSVs). The SEC stated that tokenization could reduce costs and improve transparency in market infrastructure. TSVs operating under this exemption must comply with requirements regarding public disclosure, trade transparency, circuit breaker coordination, and record-keeping, while also adhering to caps on ticker counts and trading volumes. The initiative aims to gather data on on-chain trading venues to inform future long-term regulatory rules.