Insights

The Securities and Exchange Commission today issued an order granting temporary, conditional exemptive relief to Tokenized Securities Venues — each a "TSV" — from the definition of "exchange" in the Securities Exchange Act of 1934 (Exchange Act) to trade tokenized National Market System (NMS) stock using innovative permissioned automated market makers and liquidity pools (together "AMM Liquidity Pools").

TSVs bring together buyers and sellers of tokenized NMS stock by: (1) providing one or more AMM Liquidity Pool(s) for permissioned participants to interact and agree to terms of a trade and (2) setting standards for persons to access trading on such AMM Liquidity Pool(s).

“Today, the Securities and Exchange Commission is taking a significant step forward, within its statutory authority, to bring America's capital markets into the digital age by facilitating onchain trading of certain tokenized stocks through the 'Innovation Exemption.' The Innovation Exemption, while temporary, would allow TSVs to trade tokenized NMS stock in a permissioned environment today while the Commission considers the need for additional action to facilitate onchain trading. As we take this important first step, we invite public comment on all aspects of the Innovation Exemption to help inform the Commission as it considers further changes.”

"Today's approval of exemptive relief for on-chain secondary trading on a TSV — known as the 'Innovation Exemption' — marks an important milestone for the Commission's work to open our capital markets for tokenized securities," said Jamie Selway, Director of the SEC Division of Trading and Markets. "The division stands ready to work with interested parties seeking to operate a TSV and field questions from investors and market participants."

The exemption from the definition of "exchange" for TSVs is subject to conditions designed to ensure the exemptive relief is in the public interest and consistent with the protection of investors, including that: tokenized NMS stocks traded on a TSV are subject to limits on the number of symbols and volume traded; a TSV must verify that the tokenized NMS stock made available for trading provides holders the same rights and privileges as traditional NMS stock of an equivalent class; before making available for trading a tokenized NMS stock tokenized by an unaffiliated third party, the TSV must provide written notice and an opportunity to object to the issuer of the underlying NMS stock; smart contracts used by a TSV must be auditable, public, and deployed on a public, permissionless distributed ledger; a TSV must stop trading in a tokenized NMS stock concurrently with any stoppage of trading in the underlying NMS stock on the primary listing exchange; and a TSV must provide public notice about its operations, trading activities, and the trading activities of its affiliates on the TSV.

In addition, the order also will temporarily grant a conditional exemption from the definition of "dealer" as defined in section 3(a)(5) of the Exchange Act to liquidity providers in an AMM Liquidity Pool used by a TSV that supply liquidity in the form of tokenized NMS stock using proprietary capital and may also be engaged in additional activities that are indicia of dealing activity, such as quoting pricing to customers or entering into agreements to provide committed capital.

The exemptions are set to expire five years after publication. The order solicits public comment about possible modifications to the exemptive relief and potential next steps. The order will be published on SEC.gov and in the Federal Register. The SEC looks forward to continued public engagement on the temporary exemptions.

The Securities and Exchange Commission today proposed to update the rules and forms that apply to registered transfer agents. Transfer agents are a key component of the national clearance and settlement system. Transfer agents now perform a more diverse array of functions and services that may not be adequately addressed by the Commission's transfer agent rules, which have not been substantively updated since the first rules were adopted in the late 1970s and early 1980s.

The rule proposal would modernize the federal transfer agent rules, while continuing to facilitate the safe and efficient functioning of the U.S. securities markets and the national clearance and settlement system.

“This proposal would streamline and modernize the Commission's rules to reflect transfer agents' current processes and operations, including the use of electronic communications and blockchain technology in connection with securities offerings and the transfer of shares.”

"As technology changes and the competitive marketplace evolves, good government requires revisiting legacy rules and regulations," said Jamie Selway, Director of the SEC's Division of Trading and Markets. "This proposal is another important step in Chairman Atkins' efforts to advance our regulatory framework for the modern era."

The proposed rule updates reflect the technological environment in which transfer agents operate, including the widespread use of electronic recordkeeping and communications, and the services they provide to issuers, investors, and other market intermediaries. The proposal would amend existing rules and forms, would rescind a rule, and would introduce new rules that apply to registered transfer agents and their activities.

The proposing release is published on SEC.gov and will be published in the Federal Register. The public comment period will remain open for 60 days after the date of publication in the Federal Register.

The Securities and Exchange Commission today announced that it proposed new rules, titled "Regulation Crypto Assets," that would create a clear and fit-for-purpose framework for certain investment contracts involving crypto assets. This proposal follows the Commission's March 2026 interpretation clarifying how the federal securities laws apply to certain crypto assets and transactions involving crypto assets.

Together, these efforts introduce a comprehensive, tailored securities offering regime intended to address long-standing barriers to responsible capital formation and innovation within domestic crypto asset markets, while preserving the investor protections at the core of federal securities laws.

“As we continue the Commission's efforts to provide clarity for crypto markets, and as Congress works to establish a lasting regulatory framework, Regulation Crypto Assets seeks to provide crypto asset entrepreneurs and market participants with clear pathways to raise capital under the federal securities laws. In line with the Commission's earlier interpretative guidance, this proposal would also allow for a safe harbor once an issuer has completed or permanently ceased all essential managerial efforts that it represented or promised it would take under an investment contract. Congress designed our securities laws to amplify – within specific guardrails – opportunities for entrepreneurs to innovate and build new products. Advancing this regulatory framework is a key element in our strategy to advance the rule books for the modern era and another step by the Commission to onshore innovation in crypto asset markets for generations to come.”

The proposed rules include two exemptions from the registration requirements of the Securities Act of 1933 specifically tailored to certain investment contracts involving crypto assets. The first is a one-time exemption that would permit offerings of up to $5 million during a four-year period. The second exemption would permit offerings of up to $75 million during each 12-month period. Under both exemptions, issuers would be required to make certain principles-based narrative disclosures available to their investors. In addition, issuers under the second exemption would be required to provide financial statements and be subject to ongoing reporting requirements.

The proposed rules also include a conditional safe harbor from the term "investment contract" in the definitions of "security" in the Securities Act of 1933 and the Securities Exchange Act of 1934. If the conditions of that proposed safe harbor are satisfied, then a crypto asset would be deemed not to be subject to an investment contract for purposes of those definitions of "security." In addition, the proposed rules would preempt state securities law registration and qualification requirements with respect to offers and sales of securities issued pursuant to an exemption in Regulation Crypto Assets, as well as certain secondary market transactions.

By building on the Commission's interpretive guidance issued earlier this year, the proposed rules aim to bring greater clarity to when crypto assets fall within the federal securities laws, reduce incentives for issuers to create and operate offshore, and expand investment opportunities for U.S. investors with stronger, more consistent protections.

The public comment period will remain open for 60 days following the date of publication of the proposing release in the Federal Register.