Robinhood

Paul Atkins

<p>The U.S. Securities and Exchange Commission issued a <a href="https://www.sec.gov/newsroom/press-releases/2026-90-sec-issues-innovation-exemption-facilitate-trading-tokenized-nms-stock-request-comment" rel="noopener noreferrer nofollow">five-year Innovation Exemption</a> on September 17, allowing qualifying venues to trade tokenized U.S.-listed stocks through permissioned automated market makers and liquidity pools without registering as national securities exchanges.</p>
<p>The framework covers tokenized National Market System stocks and grants separate temporary relief from dealer registration to qualifying liquidity providers using proprietary capital. SEC Chair Paul Atkins called the order a step toward bringing U.S. capital markets “into the digital age” after the Senate <a href="https://cryptoadventure.com/senate-blocks-clarity-act-from-advancing-in-49-50-cloture-vote/" rel="noopener noreferrer nofollow">blocked the CLARITY Act</a> in a 49-50 procedural vote earlier this week.</p>
<h2 id="tokenized-shares-must-carry-full-stockholder-rights">Tokenized Shares Must Carry Full Stockholder Rights</h2>
<p>The SEC action comes as Washington advances digital asset policy on several fronts. A day earlier, the House Financial Services Committee <a href="https://cryptoadventure.com/house-committee-advances-strategic-bitcoin-reserve-bill-in-28-21-vote/" rel="noopener noreferrer nofollow">advanced the Strategic Bitcoin Reserve bill</a> in a 28-21 vote, moving legislation that would place qualifying federally held Bitcoin under Treasury custody with a 20-year holding requirement.</p>
<p>Eligible tokens must represent actual NMS stocks and provide holders with the <a href="https://www.sec.gov/files/rules/exorders/2026/34-106402.pdf" rel="noopener noreferrer nofollow">same rights and privileges</a> as the corresponding conventional shares, including dividends, voting rights and residual claims in a liquidation. Synthetic products that merely track a stock price without conveying those rights are excluded.</p>
<p>The restriction matches the narrower approach the SEC outlined earlier this year when Commissioner Hester Peirce <a href="https://cryptoadventure.com/sec-slows-tokenized-stock-hype-as-peirce-narrows-exemption-scope/" rel="noopener noreferrer nofollow">drew a line between tokenized shares and synthetic exposure</a>. Primary offerings cannot use the exemption, which applies to secondary-market trading.</p>
<p>Companies also receive control over unaffiliated third-party tokenization. A venue must notify an issuer at least 30 days before opening trading in a third-party-tokenized version of its shares, and an issuer can block the listing by submitting an objection during that period.</p>
<h2 id="trading-gets-volume-caps-and-public-blockchain-requirements">Trading Gets Volume Caps and Public Blockchain Requirements</h2>
<p>The SEC capped Tier 1 tokenized stocks at 75 symbols and 0.25% of the underlying stock’s prior-month average daily volume. Tier 2 venues can support up to 250 symbols and 2.5% of average daily volume. Repeated breaches of a volume threshold trigger a three-month trading pause for the affected <a href="https://cryptoadventure.com/tokenized-stocks-explained-what-you-own-custody-and-dividends/" rel="noopener noreferrer nofollow">tokenized stock</a>.</p>
<p>Smart contracts must be auditable, publicly available and deployed on a public permissionless distributed ledger, while participant access remains permissioned. Trading must also stop whenever the underlying stock is halted on its primary exchange. The <a href="https://cryptoadventure.com/community/articles/the-role-of-the-sec-and-other-regulatory-bodies-in-crypto/" rel="noopener noreferrer nofollow">SEC</a> identified self-custody, fractional ownership, around-the-clock trading and near-instant settlement among the capabilities the structure could support.</p>
<p>The exemption follows months of work toward <a href="https://cryptoadventure.com/sec-rule-rollback-could-clear-path-for-tokenized-stock-amms/" rel="noopener noreferrer nofollow">onchain stock AMMs</a> and parallel institutional tokenization projects, including a <a href="https://cryptoadventure.com/jpmorgan-blackrock-and-goldman-join-dtcc-stock-tokenization-trial/" rel="noopener noreferrer nofollow">DTCC trial involving JPMorgan, BlackRock and Goldman Sachs</a>.</p>
<h2 id="tenev-and-saylor-back-the-sec-move">Tenev and Saylor Back the SEC Move</h2>
<p>Robinhood CEO Vlad Tenev said <a href="https://x.com/vladtenev" rel="noopener noreferrer nofollow">“Tokenization is coming to America”</a>, pointing to 24/7 markets, instant settlement and fractional ownership as potential benefits of the new framework. Robinhood already operates tokenized-stock products outside the U.S., although those products use a <a href="https://cryptoadventure.com/how-to-trade-tokenized-stock-perps/" rel="noopener noreferrer nofollow">different structure from the full-shareholder-rights</a> model required under the SEC exemption.</p>
<p>Strategy Executive Chairman Michael Saylor called the decision a <a href="https://x.com/saylor/status/2100592535991091385" rel="noopener noreferrer nofollow">“major breakthrough”</a> for digital credit and U.S. capital markets, saying the framework could allow qualifying venues to offer 24/7 onchain trading of tokenized MSTR and STRC to U.S. investors.</p>
<p>Saylor’s response followed his reaction to the failed CLARITY Act vote two days earlier, when he wrote, <a href="https://x.com/saylor/status/2099938134154695082" rel="noopener noreferrer nofollow">“The only clarity you need is Bitcoin.”</a></p>
<p>The post <a href="https://cryptoadventure.com/sec-grants-five-year-exemption-for-onchain-tokenized-stock-trading/" rel="noopener noreferrer nofollow">SEC Grants Five-Year Exemption for Onchain Tokenized Stock Trading</a> appeared first on <a href="https://cryptoadventure.com" rel="noopener noreferrer nofollow">Crypto Adventure</a>.</p>

SEC Grants Five-Year Exemption for Onchain Tokenized Stock Trading

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