SEC Issues Temporary Exemptions for Tokenized Stock Venues and Liquidity Providers

The Securities and Exchange Commission issued an order, Release No. 34-106402, File No. 4-927, on September 17, 2026, granting temporary, conditional exemptions under Section 36(a)(1) of the Securities Exchange Act of 1934. The order exempts "Tokenized Securities Venues" (TSVs) from the definition of "exchange" in Section 3(a)(1) and exempts certain liquidity providers in automated market maker (AMM) liquidity pools from the definition of "dealer" in Section 3(a)(5).

A TSV is defined as an organization that brings together buyers and sellers of tokenized NMS stock by providing one or more AMM liquidity pools for permissioned participants and by setting standards for access to those pools. "Tokenized NMS Stock" means an NMS security that is tokenized by the issuer or a third party, excluding securities where a third party issues a crypto asset that provides synthetic exposure, as well as rights and warrants. The order also defines a "Covered Firm" as a liquidity provider that supplies tokenized NMS stock using proprietary capital and may engage in activities such as quoting prices or committing capital.

The SEC stated that the exemptions are appropriate in the public interest and consistent with investor protection, and it solicited public comment on the conditions attached to the exemptions. The order references the Crypto Task Force established on January 21, 2025, which has held roundtables - including an April 11, 2025 session on secondary market trading - to inform the Commission's approach to crypto-related securities.

The exemptions apply to permissioned trading of tokenized NMS stocks using AMM liquidity pools and are subject to conditions the Commission may impose. The order was published in the Federal Register, Volume 91, Number 182, on September 22, 2026, pages 60168-60184, and is identified as FR Doc No. 2026-19388.