Tackling proxy plumbing issues: how tokenized securities are moving from theory to boardroom agenda -
RWA Signal Insight
StocksDuring a Governance Intelligence briefing, experts from Latham & Watkins and Broadridge Financial Solutions emphasized that tokenized securities are legally identical to traditional stocks, representing a shift in record-keeping rather than asset class. Zachary Fallon and Rob Krugman argued that tokenization is now a board-level priority, as it offers the potential to expand the investor base from millions to billions through 24/7 global trading. While the SEC has provided a more supportive environment since early attempts in 2013, secondary market trading and regulatory clarity remain the primary hurdles for widespread adoption. The panel highlighted that smart contracts could revolutionize corporate governance by automating dividend payments, stock splits, and proxy voting. By replacing legacy systems like the DTCC with blockchain-based records, companies can achieve greater transparency and eliminate complex reconciliation issues. Major institutions, including the NYSE, Nasdaq, and the DTCC, are actively developing infrastructure to support this transition. Ultimately, the experts urged public companies to begin internal education and strategic planning now to prepare for a future where native digital issuance becomes standard.
Key points
- Broadridge and Latham & Watkins experts confirm tokenized stocks remain subject to existing securities laws.
- Tokenization could expand potential equity investor pools from 250 million to five billion people.
- Smart contracts enable automated corporate actions and resolve long-standing proxy voting reconciliation challenges.
- NYSE, Nasdaq, and DTCC are actively building infrastructure to support tokenized security trading.
Background
Broadridge Financial Solutions is a global fintech leader providing investor communications and technology-driven solutions for banks, broker-dealers, and corporate issuers. They specialize in the infrastructure that powers the lifecycle of securities, including proxy voting, trade processing, and regulatory reporting. Their involvement in tokenization focuses on modernizing the 'plumbing' of financial markets to improve settlement speed and shareholder transparency.