Tokenized stocks are ordinary listed shares represented as tokens on a blockchain. That is not the same as a free-for-all crypto exchange. On 17 September 2026, the U.S. Securities and Exchange Commission issued temporary, conditional exemptive relief—often called the Innovation Exemption—aimed at permissioned onchain secondary trading of tokenized NMS stock. [1]
NMS stock means National Market System equity—broadly, the kind of U.S. listed stock that sits in the national market system. “Tokenization” here means representing that stock as a crypto-format instrument while, under the order’s conditions, holders must get the same rights as traditional shares of an equivalent class. [1][2]
What relief did the SEC grant?
The order grants two forms of relief, each set to run five years after publication: [1][2]
- An exemption from the Exchange Act “exchange” definition for Tokenized Securities Venues (TSVs) that trade tokenized NMS stock through permissioned automated market makers and liquidity pools.
- A conditional exemption from the “dealer” definition for certain Covered Firms that supply tokenized NMS stock to those AMM pools with proprietary capital.
An automated market maker (AMM) is software that prices trades from a liquidity pool rather than a traditional order book of bids and offers.
What conditions apply?
The SEC’s press release highlights conditions including symbol and volume limits; verification that tokens confer the same rights as traditional NMS stock; issuer notice and objection rights for third-party tokenization; public, auditable smart contracts on a permissionless ledger; concurrent trading halts with the primary listing exchange; and public operational notices. [1]
WilmerHale’s 5 October 2026 client alert—secondary analysis, not the order itself—summarises Tier 1 / Tier 2 symbol and volume caps (for example, limits on how many symbols and what share of prior-month average daily volume a TSV may trade), Covered Firm conditions, and detailed notice requirements. [2]
Synthetic exposure products, such as tokenized linked securities or security-based swaps, sit outside the Order’s Tokenized NMS Stock definition, per that same law-firm analysis. [2]
Why it matters
Congress has not delivered a full market-structure statute for this area. The Innovation Exemption is an interim path under existing Exchange Act exemptive authority: permissioned onchain secondary trading of certain tokenized U.S. equities, while the Commission solicits comment toward possible later rulemaking. [1][2]
What this does not prove
- That tokenized NMS stock trading is now permanently deregulated; relief is temporary and conditional. [1]
- That synthetic “price-of-stock” tokens are covered; WilmerHale says they are not under this Order’s definition. [2]
- That any particular venue is already live under the exemption; the order clears a conditional path and invites comment. [1]
The Bottom Line
The SEC has opened a five-year, conditions-heavy Innovation Exemption for permissioned AMM-style trading of tokenized NMS stock, plus limited dealer relief for some proprietary liquidity providers. Treat it as a bridge toward comments and possible rulemaking—not as a blank cheque for onchain equity markets.
Sources
- SEC Press Release 2026-90, 17 September 2026 — https://www.sec.gov/newsroom/press-releases/2026-90-sec-issues-innovation-exemption-facilitate-trading-tokenized-nms-stock-request-comment
- WilmerHale client alert, 5 October 2026 — https://www.wilmerhale.com/en/insights/client-alerts/20261005-the-innovation-exemption-arrives-sec-clears-a-conditional-path-for-onchain-trading-of-tokenized-nms-stocks
