SEC Issues Five-Year Innovation Exemption for Tokenized NMS Stock to Trade Onchain

The U.S. Securities and Exchange Commission issued an order today granting conditional exemptive relief to "Tokenized Securities Venues" (TSVs), releasing them from the definition of "exchange" under the Securities Exchange Act of 1934. The exemption creates a five-year window for tokenized National Market System stocks to trade through permissioned automated market makers and liquidity pools on public blockchains.

The SEC's announcement is explicit on the ledger requirement: smart contracts used by a TSV "must be auditable, public, and deployed on a public, permissionless distributed ledger." That condition excludes private bank chains and consortium networks from qualifying. Open networks like Solana (SOL) satisfy the definition without modification.

SEC Chairman Paul S. Atkins described the order as allowing TSVs to "trade tokenized NMS stock in a permissioned environment." Jamie Selway, Director of the Division of Trading and Markets, called it "an important milestone for the Commission's work to open our capital markets for tokenized securities."

What Tokenized Securities Venues Must Satisfy

The exemption attaches four operating conditions. TSVs must synchronize trading halts with the primary exchange: when the underlying stock halts, trading of the tokenized version must halt too. They must confirm that tokenized NMS stocks carry "the same rights and privileges as traditional NMS stock." Before listing a third-party issuer's tokenized shares, a TSV must deliver written notice to that issuer and provide an opportunity to object. Public disclosure of operations and trading activity is also required.

The order extends parallel relief to affiliated liquidity providers from the "dealer" registration requirement under Section 3(a)(5) of the Exchange Act, clearing a path for on-chain market makers supplying AMM pools. Caps on the number of tradeable symbols and aggregate volume apply; the press release does not publish specific thresholds. The exemption expires five years from its September 17, 2026 publication date.

Solana Qualifies From Day One; Private Bank Chains Do Not

Kristin Smith, president of the Solana Policy Institute, drew the line plainly: "So @solana qualifies from day one...The private bank chains do not." The Institute, whose Project Open proposal submitted to the SEC in April 2025 had called for a pilot permitting equity trading on public blockchains, said in a thread today that the order has "the potential to move trillions of dollars in existing financial assets onto 'public, permissionless' blockchains like @solana, positioning the US as the home of internet capital markets."

The Institute thanked Chairman Atkins, Commissioner Hester Peirce, SEC staff, and the Crypto Task Force, calling the action "a historic step forward in how the SEC approaches blockchain technology and related financial infrastructure." Solana Foundation president Lily Liu called it "Landmark."

Solana entered today holding a substantial share of on-chain equity trading: the network logged $10 billion in tokenized stock volume in June 2026, capturing roughly 95% of global on-chain equity trading at the time.

Backpack, xStocks, Raydium, and Pyth Position for the Exemption

Backpack Backpack's Onchain account responded directly: "The SEC has issued a five-year 'Innovation Exemption' allowing tokenized US stocks to trade onchain through permissioned AMMs and liquidity pools. Build on Backpack." Separately, Backpack Securities today expanded equity collateral to cover all 17 of its listed stocks and ETFs.

xStocks xStocks placed the ruling in a cross-border context: "Tokenized equities are how the next generation of market infrastructure gets built: faster settlement, fractional access and markets that don't close at 4pm. Other jurisdictions have already opened the door to tokenization. Today's @SECGov Innovation Exemption helps bring that access home to American builders and investors."

Raydium Raydium, one of Solana's leading AMM providers, said it was bullish on the future of tokenized stocks on Solana.

Pyth Network Pyth Network noted in a post today that the infrastructure for these venues is already in place: over 95% of existing onchain RWA perpetual volume already uses Pyth data, with CFTC-regulated exchanges and U.S. federal agencies among its data providers. The team called on builders operating under the exemption to disclose Pyth as their market data source for U.S. markets.

The SEC is accepting public comment on the exemption.