SEC clears path for tokenized stocks, bringing the market closer to 24/7 trading
The long awaited Innovation Exemption comes two days after the Senate voted to block the Clarity Act crypto market structure bill from advancing.
TL;DR
- The SEC has issued an "Innovation Exemption" allowing certain trading venues to issue tokenized stocks.
- Key conditions include holders retaining all traditional rights and companies having the ability to object to tokenization.
- This regulatory move comes after the Clarity Act, a crypto market structure bill, failed to advance in the Senate.
- The exemption is a five-year measure intended to allow market evolution and inform future, durable rulemaking.
- Tokenization could enhance accessibility and liquidity, potentially enabling 24/7 trading and easier integration with blockchain infrastructure.
- The exemption includes volume limits to mitigate risks like increased volatility.
- Companies can object to their securities being tokenized by notifying the trading venue, which must then wait 30 days before trading the token.