SEC Chairman Paul Atkins is expected to roll out an "innovation exemption" framework for tokenized stock trading through regulated Alternative Trading Systems, opening the door to 24/7 on-chain equity markets. The proposal lands as tokenized stocks hit $33.7 billion in market value, up 21% in the last 30 days, with monthly transfer volume at $3.03 billion.
Why the SEC moved now
The SEC's January 2026 joint staff statement already made clear that tokenization doesn't change a security's fundamental characteristics — meaning existing rules on disclosure, custody, and investor protection still apply. The new exemption would layer a lighter regulatory path on top of that baseline, letting regulated ATS platforms trade tokenized shares around the clock. The DTC Pilot, granted in December 2025, gave the DTCC three-year no-action relief for tokenized trading of DTC-eligible securities, but required real-time regulatory observability. That pilot set the stage.
How the framework would work
The proposal distinguishes between issuer-affiliated and third-party tokenized stocks, with differing disclosure obligations and custodial structures. The SEC already approved Nasdaq's March 2026 rule change allowing trading of tokenized equities and ETPs with identical tickers, market rules, and economic rights as the underlying shares. That rule change was a prerequisite; the exemption is the next step.
The CLARITY Act wildcard
The CLARITY Act cleared the Senate Banking Committee and needs 60 votes to overcome a filibuster — meaning at least 17 Democrats would have to back it. Polymarket puts the probability of a 2026 Senate floor vote at 64%. If the bill passes, primary crypto trading oversight shifts to the CFTC, while the SEC keeps jurisdiction over digital securities. That would affect how tokenized equity platforms are regulated. The projected tokenized stock market could hit $5 billion by year-end if the CLARITY Act passes, accelerating from the current $1.43 billion.
Who's already in
Ondo commands 60% of the on-chain stock market. Tokenized shares of Circle Group ($212 million), NVIDIA ($89.3 million), and Tesla ($85.4 million) represent over a quarter of total tokenized stock value across more than 266,000 holders. NYSE has partnered with Securitize for tokenized securities markets, and at least one other U.S. exchange is planning 24/7 tokenized trading with stablecoin settlement. The infrastructure is being built before the rules are final.
The SEC is expected to publish the formal exemption proposal in the coming weeks, with a comment period to follow. The clock is also ticking on the CLARITY Act — if it doesn't get 60 votes this session, proponents will have to start over next year.
