SEC Grants Five-Year Exemption for Tokenized Stock Trading
The SEC issued a 60-page order allowing tokenized NMS stocks to trade with issuer veto rights, resolving the AMC dispute.
Key points
- The SEC issued a six-page order granting a five-year exemption for trading tokenized NMS stocks.
- The rule requires venues to honor issuer objections to tokenization within thirty days.
- AMC CEO Adam Aron praised the decision after Robinhood tokenized shares without company consent.
The U.S. Securities and Exchange Commission granted a five-year exemption for trading tokenized equities. This move directly addresses the legal conflict between AMC and Robinhood over unauthorized share tokenization.
AMC CEO Adam Aron publicly praised the decision after criticizing Robinhood’s synthetic equity wrapper. The new rules require venues to honor corporate objections within a strict thirty-day window.
Regulatory Framework for Tokenized Equities
The September 17 order provides conditional relief to tokenized securities venues. It permits the use of permissioned automated market makers for National Market System stocks.
Commissioner Hester Peirce described the approach as tailoring rules to fit specific market participants. She rejected a one-size-fits-all model that would force distinct assets into generic regulatory structures.
AMC Dispute Drives Issuer Veto Rights
Robert Leshner of Superstate noted the exemption excludes third-party synthetic exposure instruments. This specific exclusion directly targets the structure Robinhood used for AMC shares without consent.
Issuers now hold an effective veto over token listings of their own equity. Venues must publicly disclose any corporate objection within five business days of receiving it.
Industry Reaction to New Standards
Alex Thorn of Galaxy Digital called the order a controversial middle ground. It balances open secondary markets against the need for issuer control over capital raising.
Traders Magazine reports that this framework aims to restore public trust in financial markets. It ensures tokenized shares carry the same rights as traditional underlying stock.
