SEC to announce framework for tokenized stock trading

The SEC will unveil a framework this week for trading tokenized stocks, allowing digital versions of listed shares to be traded under current laws. Major exchanges and DTCC are preparing for blockchain-based operations.

The U.S. Securities and Exchange Commission (SEC) is set to unveil a regulatory framework this week that will enable the trading of tokenized stocks. This marks a significant step toward integrating blockchain technology with traditional financial markets. The framework, known as an "innovation exemption," will allow shares of publicly listed companies to be traded as blockchain-based tokens under existing securities laws. This move follows recent SEC approvals for Nasdaq and the New York Stock Exchange to trade tokenized stocks and ETFs, covering major indices and large-cap companies. The new guidelines will outline requirements for issuers and exchanges, including custody, disclosure, and investor protection measures. The Depository Trust & Clearing Corporation (DTCC) plans to begin trial operations with tokenized assets in July, with further expansion expected in October. The SEC emphasizes that tokenized securities remain subject to all existing federal securities laws, ensuring no special exemptions from registration or reporting. These developments are expected to provide legal clarity and foster innovation while maintaining regulatory oversight.