SEC approves Nasdaq rule change permitting trading of tokenized securities

What happened

The Commission approved Nasdaq's proposed rule change enabling the trading of tokenized versions of securities already listed on the exchange, treating the token as a different settlement representation of the same security rather than as a new instrument. The order was accompanied by Commission guidance on the application of the federal securities laws to tokenized securities, which law firms characterised as the first substantive interpretation of its kind. The structure keeps the security's registration, issuer disclosure and transfer-agent obligations intact. What changes is the settlement path: a token record can be used where a book-entry position at a depository would otherwise sit, subject to the exchange's rules. Separately, market participants expected the Commission to publish an innovation exemption for tokenized equities by 18 May 2026. That exemption had not been issued by late July 2026, leaving platforms offering tokenized exposure to US equities outside the exchange framework to operate under existing law.

Why it matters

An approved national securities exchange rule for tokenized trading changes the venue question. Tokenized equity exposure has largely been offered offshore or through derivative wrappers; running it inside a registered exchange with an approved rulebook puts it under the same surveillance, best-execution and market-data obligations as ordinary listed trading. The unissued innovation exemption is the more consequential open item. Without it, the distinction between a tokenized security traded on an approved exchange and a token that tracks a share price remains a legal line rather than an economic one, and the two will be priced and regulated very differently.

What is not settled

The SEC's innovation exemption for tokenized equities had not been issued as of late July 2026; the launch date and instrument scope of Nasdaq tokenized trading are not public.