SEC approves Nasdaq rule change permitting trading of tokenized securities
The Securities and Exchange Commission approved a Nasdaq rule change on 18 March 2026 allowing certain tokenized securities to trade on the exchange, alongside an interpretation of how the federal securities laws apply to tokenized instruments. A related exemption for tokenized stocks that had been expected in May 2026 was not issued on that timetable.
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.
Institutions in this story
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US Securities and Exchange Commission
Regulator
The federal securities regulator created in 1934, which stated on 28 January 2026 that the format in which a security is issued and the method by which holders are recorded do not change how the federal securities laws apply.
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Nasdaq, Inc.
Exchange
Operator of the Nasdaq Stock Market, which won SEC approval on 23 March 2026 to let members trade Russell 1000 constituents in tokenized form on the same order book, making the change a settlement option rather than a separate market.
On the record
SEC approves Nasdaq rule change enabling trading of tokenized securities
The SEC approved a Nasdaq proposed rule change, as modified by Amendment No. 2, permitting securities to trade on the exchange in tokenized form through DTC's tokenization pilot, in Release 34-105047. Eligible participants may set a tokenization flag on orders in Russell 1000 constituents and large index ETFs; tokenized and conventional shares trade on the same order book with the same priority provided they remain fungible and share the same CUSIP and symbol.