The U.S. Securities and Exchange Commission (SEC) has unveiled an Innovation Exemption that allows eligible platforms to trade tokenized U.S. stocks on public blockchains without requiring national exchange registration. This move comes just days after the Senate rejected the Clarity Act, with SEC Chair Gary Gensler emphasizing the Commission's proactive approach in the absence of congressional action.
This exemption enables Tokenized Securities Venues to use automated market makers and liquidity pools for trading. Firms that meet specific criteria will not have to register as dealers and can begin operations immediately after notifying the SEC. The exemption, which is effective for five years, is limited to genuine tokenized stocks that provide full rights, including dividends and voting, thereby excluding synthetic versions.
Additionally, the actual issuer of a stock can object to its tokenization within 30 days, granting companies some control over the process. This aligns with recent comments from AMC's Adam Aron, who had previously criticized Robinhood's stock tokens.
