In a significant regulatory development, a coalition representing leading stock exchanges has formally opposed the U.S. Securities and Exchange Commission’s proposed “innovation exemption” for tokenized stock offerings. The exchange group contends that blanket regulatory relief for brokers and cryptocurrency platforms seeking to offer digital representations of traditional equities would create substantial market integrity risks.
The industry representatives argue that any exemptions should be precisely targeted and conditional rather than broadly applied. They emphasize that tokenized securities require specific regulatory safeguards to maintain investor protection standards equivalent to those in traditional equity markets. The exchanges’ position highlights concerns about potential market fragmentation, inconsistent disclosure requirements, and differential treatment of similar financial instruments across trading venues.
This opposition comes as financial regulators globally grapple with balancing innovation in digital asset markets with established securities law protections. The stock exchange coalition maintains that any regulatory framework for tokenized stocks must ensure consistent application of existing market structure rules, including transparency requirements, trade reporting obligations, and surveillance mechanisms. Their recommendations call for a more nuanced approach that would allow innovation while preserving core market protections that have underpinned equity trading for decades.
