SEC approves temporary Innovation Exemption for pilot trading of tokenized NMS stocks on specific venues

The U.S. Securities and Exchange Commission (SEC) approved a plan for digital versions of securities to begin trading in the United States after a key Senate vote failed on crypto legislation, according to Bloomberg Crypto ^[1].

The SEC also approved a temporary, conditional exemptive framework, called the “Innovation Exemption,” to allow limited pilot trading of tokenized National Market System (NMS) stocks on specific onchain platforms referred to as Tokenized Securities Venues (TSVs), with the intent of providing regulatory relief so TSVs are not immediately classified as “exchanges” under the Securities Exchange Act of 1934 when offering tokenized equities via permissioned automated market makers (AMMs) and liquidity pools ^[2].

Crypto Briefing described the SEC’s Innovation Exemption as a temporary framework for onchain tokenized stock trading and characterized it as potentially aimed at improving transparency and liquidity while lowering costs ^[3].

Bankless News said the Innovation Exemption permits permissioned AMMs to trade tokenized, rights-bearing U.S. stocks “for the first time,” framing it as a legal path opened by the SEC for tokenized stocks ^[4].

Bitcoin.com News reported that the SEC opened a path for Wall Street stocks to trade onchain via the new SEC framework, though it did not add additional operational details beyond the general development described in its coverage ^[5].