US SEC Grants Temporary Tokenized Stock Trading Exemption
The SEC issued a temporary rule today. It allows limited trading of tokenized stocks.
The rule is called an Innovation Exemption. It gives special platforms called TSVs conditional relief.
TSVs normally must follow strict stock exchange rules. This exemption removes that requirement for now.
TSVs can use automated trading tools and liquidity pools. But they must meet strict conditions.
These include trading limits and equal shareholder rights. Platforms must also use auditable smart contracts.
The exemption expires after five years. The SEC also eased dealer rules for some liquidity providers.
The rule started immediately but may change. The SEC is asking the public for feedback.
This followed the Senate blocking the Clarity Act two days earlier. That bill covers broader crypto market rules.
Key Terms 5
- SEC US Securities and Exchange Commission oversees stock markets and investor protection.
- Tokenized stocks Digital versions of company shares recorded on blockchain technology.
- TSV Tokenized Securities Venue, a platform that trades tokenized stocks.
- Smart contracts Computer programs that automatically carry out trading rules.
- Clarity Act A proposed US law setting broader rules for crypto markets.