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ARTICLE · 28 OCTOBER 2026

SEC Tests New Framework For On-chain Trading Of Certain Tokenized Stocks

McDermott Will & Schulte
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The SEC's innovation exemption order establishes a regulatory framework for trading tokenized US stocks on blockchain-based venues, creating a pathway for secondary-market transactions through automated market makers while imposing strict conditions on access, technology, and investor protection. This interim measure addresses how securities that remain subject to federal law may trade on-chain, following the Senate's failure to advance comprehensive crypto legislation.

United StatesFinance and Banking
Joseph B. Evans
Joseph B. Evans
Nishi Gupta
Nishi Gupta
Zachary Feinstein
Zachary Feinstein
Vinicius Aquini
Vinicius Aquini
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Overview

On September 17, 2026, the US Securities and Exchange Commission (SEC) authorized a temporary framework for trading certain tokenized stocks on blockchain-based trading venues. See SEC, SEC Issues “Innovation Exemption” to Facilitate the Trading of Tokenized NMS Stock and Request for Comment, Release No. 2026-90 (Sept. 17, 2026); see also SEC, Order Granting Temporary Conditional Exemptive Relief, File No. 4-927 (Sept. 17, 2026)). Through its “innovation exemption” order, the SEC granted conditional relief to qualifying tokenized securities venues (TSVs) from the “exchange” definition under the Securities Exchange Act of 1934 and separately granted relief from the definition of “dealer” to certain firms that provide liquidity to those venues. (See innovation exemption order at 1 – 2). The exemptions allow qualifying TSVs to facilitate secondary-market trading of tokenized National Market System (NMS) stock through permissioned automated market makers and liquidity pools

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