The Securities and Exchange Commission is advancing an “innovation exemption” for tokenized listed securities that Chair Paul Atkins says would give market participants a cabined framework to begin facilitating compliant onchain trading while the Commission develops long-term rules. Bloomberg reported Aug. 11 that the measure could pave the way for 24/7 trading of stock tokens on blockchains.
Atkins' public descriptions place the measure before release. In April remarks, he said the SEC was “on the cusp” of releasing the framework. In May, he called it a “forthcoming innovation exemption for tokenized listed securities.” Both speeches carried disclaimers that Atkins was expressing his own views rather than those of the Commission or other commissioners.
The cited speeches do not specify the exemption's legal form, effective date, binding conditions or the particular requirements it would alter. The SEC's Friday meeting agenda does not list the innovation exemption. Its only item is whether to issue a release proposing new rules for “a tailored offering regime for certain investment contracts involving crypto assets,” a separate initiative concerning crypto offerings.
In a Jan. 28 joint staff statement, the SEC's Divisions of Corporation Finance, Investment Management, and Trading and Markets said a security's format and recordkeeping method do not affect the application of federal securities laws. Every offer and sale must still be registered unless an exemption is available.
