US SEC grants five-year innovation exemption for tokenized NMS stock trading on AMMs

The US Securities and Exchange Commission (SEC) has issued a five-year, conditional 'Innovation Exemption' allowing Tokenized Securities Venues (TSVs) to pilot the trading of tokenized National Market System (NMS) stocks via permissioned Automated Market Makers (AMMs). Under this order, TSVs and certain liquidity providers are temporarily exempt from being classified as 'exchanges' or 'dealers' under the Securities Exchange Act of 1934. The framework requires that tokenized stocks provide full shareholder rights, including voting and dividends, and explicitly excludes synthetic tokens. TSVs must be US-based, comply with OFAC sanctions, and allow issuers to veto third-party tokenization of their shares. SEC Chair Paul Atkins stated that the move follows the recent failure of the CLARITY Act (US digital-asset market-structure bill) in Congress, emphasizing that the SEC is acting within its existing statutory authority.