SEC Allows Tokenized Stock Trading Venues to Operate Without Dealer Registration

SEC innovation exemption lets tokenized stock venues trade without dealer registration

A federal exemption issued on September 17 allows decentralized finance venues to run permissioned trading of tokenized US-listed equities without registering as exchanges or dealers under traditional securities law.

The SEC's Innovation Exemption grants five years of conditional relief to Tokenized Securities Venues and certain liquidity providers operating on public blockchains. The window runs to September 17, 2031.

Christopher Montagano, Chief Legal Officer at Orca — a decentralized exchange that has had tokenized stocks trading on its platform since November 2025 — told Korea Blockchain Week 2026 that the exemption gives blockchain-based trading infrastructure a supervised trial against conventional market structure.

The framework was designed with automated market makers and liquidity pools in mind. Instead of matching buyers and sellers through an order book with registered intermediaries, these systems execute trades against pooled assets using a pricing formula. The exemption permits that structure to operate without triggering standard dealer registration requirements.

Conditions apply. Venues must comply with sanctions rules, and the issuer whose stock is being tokenized must consent to its inclusion. The SEC stated explicitly that the exemption is not a ruling on permissionless DeFi.