How Tokenized Stock Venues May Use Public Blockchains

The U.S. Securities and Exchange Commission (SEC) has issued a five-year innovation exemption, effective from September 17, 2026, to September 17, 2031, allowing tokenized National Market System (NMS) stocks to trade on permissioned venues. Signed by SEC Chair Paul Atkins, the order provides relief from specific Exchange Act definitions for both trading venues and liquidity providers, provided they adhere to strict conditions including volume caps and issuer notification requirements. This regulatory pilot mandates that smart contracts must be public, auditable, and deployed on permissionless ledgers, marking a significant shift toward integrating public blockchain infrastructure into traditional securities markets. While the underlying assets remain standard NMS stocks, the exemption fundamentally alters the settlement and ownership recording processes. The initiative serves as a testing ground for permanent rulemaking, with the SEC monitoring performance to evaluate the viability of blockchain-based market plumbing. By enabling this experimental framework, the SEC aims to resolve long-standing barriers to capital-raising innovation while maintaining investor protections. This development is critical for the RWA market as it provides a clear, albeit temporary, legal pathway for institutional-grade tokenized equity trading on public networks like Solana.