SEC Grants 5-Year Exemption to Digital Share Platforms: Who Will Benefit?

The U.S. Securities and Exchange Commission (SEC) has issued a five-year Innovation Exemption allowing for the on-chain trading of certain tokenized shares; the exemption takes effect immediately.

In a regulation issued on September 17, 2026, the SEC took a concrete step toward bringing U.S. capital markets into the digital age. The agency’s Chair, Paul Atkins, stated that the decision will facilitate on-chain transactions of tokenized shares.

The exemption waives the requirement for certain platforms to be defined as exchanges and for certain liquidity providers to be defined as dealers. The regulation will be valid for five years. While the public is invited to provide comments, it was noted that work on more permanent rules will continue.

SEC clears the path for tokenized share platforms

The new regulation exempts certain tokenized security platforms from being defined as exchanges. This allows these platforms to carry out covered transactions without assuming the status of a traditional exchange.

Certain liquidity providers will also be exempt from being defined as dealers when trading shares or providing liquidity through automated market makers (AMMs) operating with smart contracts.

Limits of the exemption maintained

Platforms benefiting from the exemption must comply with enforcement rules. Additionally, synthetic products, which derive their price from another asset but do not provide direct ownership of that asset, are excluded from the regulation.

Share issuers may also refuse to have their securities traded on the relevant platforms. The SEC’s decision comes after the Senate failed to advance the Clarity Act, which aimed to bring comprehensive rules to the digital asset market. Atkins stated that despite the lack of comprehensive legislation from Congress, the agency is acting within its existing authority.