Capital-markets infrastructure counsel, applied to blockchain rails
Tokenized Securities Counsel
Legal architecture for tokenized public equities, Tokenized Securities Venues, issuers, infrastructure providers and onchain market participants. Start with the architecture, then build only what you need.
SEC Release No. 34-106402, File No. 4-927 · issued 17 September 2026 · effective through 17 September 2031 · framework reviewed through 20 September 2026
Sergei Tokmakov, Esq.·California Bar No. 279869, admitted 2011·Admitted in California and Washington
What actually changed
On 17 September 2026 the SEC issued five-year conditional exemptive relief that lets a qualifying U.S. operator bring together buyers and sellers of tokenized U.S. exchange-listed stock through permissioned automated market makers and liquidity pools, without registering that activity as a national securities exchange.
It is not an issuance pathway. The Order permits no primary issuance and no initial offerings on a venue relying on it. Every offer and sale of tokenized stock must still be registered under the Securities Act or made under an available exemption. The relief is about secondary trading of stock that is already listed.
And the SEC approved nothing and nobody. There is no list of authorised platforms. This is conditional relief that an eligible operator may rely on if it meets the conditions — and the Order separately prohibits a venue from saying it is registered with, or approved or endorsed by, the Commission. Marketing copy written from the headlines is itself a compliance problem.
Two exemptions arrived in one Order. The first takes a qualifying Tokenized Securities Venue outside the Exchange Act definition of “exchange”. The second takes certain liquidity providers — Covered Firms — outside the definition of “dealer”, but only for supplying tokenized stock to a qualifying pool. Both run to 17 September 2031, and the Commission has asked for comment on every condition in both.
The token has to be the real thing. To be Tokenized NMS Stock it must give the holder the same interest in the company, the same dividends, the same voting rights and the same share of residual assets on liquidation as a holder of the equivalent traditional class. A crypto asset that merely tracks the price of a listed share — a linked security or a tokenized security-based swap — is expressly outside the definition.
How a trade would actually move
- Step 1Public company share, already listed
- Step 2Issuer-sponsored or qualifying third-party tokenization
- Step 3Token carrying the same shareholder rights
- Step 4Permissioned wallet or participant
- Step 5Tokenized Securities Venue
- Step 6AMM liquidity pool
- Step 7Onchain secondary trade
Every arrow in that chain is a separate legal question, and they do not all belong to the same client. The venue owns the access rules, the caps, the feed and the halts. The issuer owns whether the rights are really there. The tokenizing party owns the parity mechanics and the proxy delivery. The liquidity provider owns its own dealer analysis.
Is this only for Nasdaq and NYSE?
No. There are now two distinct routes, and conflating them is the most common error I see in the coverage.
The registered-exchange route
Existing registered exchanges adapting their own regulated trading and settlement systems to tokenized form, tied to a DTC pilot programme.
- Nasdaq
- SEC order approving the rule change, 18 March 2026 (Release 34-105047).
- NYSE
- Rule 7.50 filed 9 April 2026 with immediate effectiveness (Release 34-105260).
- What it is
- Trading on a registered exchange, in tokenized form, inside the existing rule set.
The Innovation Exemption route
A new U.S. operator can run a permissioned onchain AMM venue without becoming a national securities exchange or using the ATS exemption for that activity — if it meets every condition.
- Instrument
- SEC Release 34-106402, 17 September 2026, five-year conditional relief.
- Who can use it
- Any eligible U.S. person, including a separate venue affiliated with a registered financial institution, provided the registered and exempt activities stay properly apart.
- What it is not
- An approval, a licence, a list, or a route to issue anything.
That second route is the interesting one commercially, because it is open to companies that are not exchanges. It is also the one with a substantial lawyer-created deliverable set: a thirty-part public disclosure published thirty days before launch, an issuer-notice procedure with a thirty-day objection window, public and auditable smart contracts, symbol and volume caps with affiliate aggregation, a ten-minute transparency feed, halt synchronisation, a leverage prohibition, and eight categories of records kept in the United States.
Tokenized securities console
Answer as your project actually is, not as you would like it to be. Nothing you enter is transmitted anywhere until you choose to send it. The console tells you which workstream you are in and what has to be verified — it does not tell you that you qualify for anything, and it is not legal advice.
Step 1 · What are you building or responding to?
Step 2 ·
Calculators
Three of the Order's conditions are arithmetic rather than judgement. These compute them, and say where each input has to come from.
1. Trading capacity — symbol and volume limits
Tier 1 is capped at 75 symbols and 0.25% of the underlying stock's prior-month average daily share volume. Tier 2 is capped at 250 symbols and 2.5%. Both counts aggregate with affiliated venues. Tiering follows the LULD Plan: Tier 1 is the S&P 500, the Russell 1000 and eligible ETPs; Tier 2 is everything else.
2. Notice and deadline planner
The public Notice, the Commission notifications and the Issuer Notice all run on their own clocks. Enter what you know and the rest is computed.
3. Public Notice readiness — the thirty required headings
The Order specifies thirty headings the Notice must cover, from the disclaimer through to the risks of being the exclusive venue for a stock. Mark each one against your own facts. Your marks stay in this browser; they are not sent anywhere.
Packages
Start with the legal architecture, then build only what you need.
Tokenized securities can raise trading-venue, broker-dealer and dealer, transfer-agent, custody, corporate, offering and blockchain-control questions at the same time. I use a fixed-fee first phase to map the regulatory perimeter before the engagement expands, so you are not paying an hourly meter to discover which regime you are in.
Fixed feeWritten deliverablesDefined scope and stated exclusionsConflict check and written scope before paymentNo open-ended hourly meter
I do not sell a “complete venue launch” as a single advertised number. The architecture engagement tells you what has to be built and in what order; the build is sold as bounded sprints against a written scope, or as one phased engagement once the architecture is settled. Quoting an all-in figure before the architecture exists would understate the work, and I would rather say that than discover it later.
Who this is for
The most commercially relevant clients here are not the exchanges. They are the companies building around this infrastructure — and they have genuinely different legal problems.
A fintech or crypto company launching a venue
Exemption architecture, the public Notice, access and permissioning rules, the issuer-notice procedure, trading controls and caps, the transparency feed, halt synchronisation, and books and records.
A public company tokenizing its own listed shares
Corporate authorization, rights parity in the charter and the mechanics, transfer-agent structure, token mechanics, Exchange Act disclosure consequences and vendor agreements.
A public issuer that received a tokenization notice
Review of the proposed third-party tokenization and a decision on whether to consent or object — inside a thirty-day window that starts on receipt, not on discovery.
A tokenization or transfer-agent company
Issuer agreements, token-rights architecture, registry mechanics, and the legal requirements that have to be true of the smart contracts. The SEC's proposed transfer-agent overhaul is relevant context here, and it is still a proposal.
A liquidity provider
The Covered Firm exemption from dealer status, the conditions around proprietary liquidity provision, the required disclosures and notification, and whether you need the relief at all.
A broker-dealer or institution integrating with a venue
Participation structure, the registered-activity perimeter, AML/CFT and sanctions, custody, and operational integration.
Reference
Everything in this section is read from the Order, with its own section numbers so you can check any line against the source.
What the token represents, and whether the Order reaches it
The four-way taxonomy comes from the staff Statement on Tokenized Securities of 28 January 2026, which the Order cites. That statement is a staff statement: it has no legal force, and the Commission has neither approved nor disapproved its content. The in-scope and out-of-scope conclusions above are the Order's scope test, not the staff statement's.
The twelve condition areas
Every deadline in the framework
The transaction data a venue must publish
Freely and publicly available, machine-readable, U.S. dollar denominated, covering all transactions in the past thirty days, updated within ten minutes of any transaction, and available to participants at the same time and on the same terms as everyone else.
The eight books-and-records categories
Kept current while the exemption is effective and for three years after it ends, maintained in the United States, produced promptly to Commission staff in both human-readable and reasonably usable electronic formats, with consent to examination at any time.
The Covered Firm conditions
Before reading these: the Order states that liquidity provision alone does not constitute dealer activity, and that absent other indicia of dealer activity a liquidity provider in an AMM liquidity pool would typically be engaged in trader activity. Relying on the exemption also creates no presumption that you are a dealer. For some firms the right answer is that the relief is not needed.
FAQ
Is this only for Nasdaq and NYSE?
No. Nasdaq and NYSE have separate registered-exchange tokenization initiatives tied to a DTC pilot programme. The September 2026 Innovation Exemption creates an additional route under which qualifying U.S. businesses can operate Tokenized Securities Venues using permissioned onchain automated market makers without exchange or ATS registration for that activity, subject to substantial conditions.
Did the SEC approve Coinbase, Kraken, Robinhood or anyone else?
No, and this matters more than it sounds. The SEC published no list of approved venues. It issued conditional relief an eligible operator may rely on if it satisfies the conditions. Because a prospective venue must publish its operating Notice at least thirty calendar days before it begins operating, nobody starting under this Order could have completed that notice period within days of it being issued. The Order also prohibits a venue from stating that it is registered with, or approved or endorsed by, the Commission.
Can a company issue new shares this way?
No. The Order permits no primary issuance or initial offerings on a venue relying on the exemption. It addresses secondary trading of stock that is already listed. An issuance still needs Securities Act registration or an available exemption, analysed on its own terms.
Does the console tell me whether I qualify for the exemption?
No, deliberately. It restates what you enter against the Order's conditions, identifies what is unresolved, and shows the section behind each row. It verifies nothing you type, several conditions turn on documents and evidence rather than intentions, and the Commission alone administers the relief. A row marked consistent addresses only the single condition it names, on the facts you gave.
Someone wants to tokenize my company’s stock. Do I have to let them?
If an unaffiliated third party proposes to tokenize your listed stock, you are entitled to written notice, and you may object on or before the thirtieth calendar day following your receipt of it. A timely objection means the venue cannot make that tokenized stock available for trading under the exemption. Whether objecting is the right answer is a separate question, and non-objection is sometimes the better commercial position. I sell the analysis, not a predetermined outcome.
Why is the architecture review $2,750 when the work could clearly run further?
Because the architecture phase has a defined end: a readiness matrix across the Order's conditions, a document inventory and an implementation sequence. What it deliberately does not include is drafting the thirty-part Notice, the access rules, the token documentation or the liquidity agreements. Those are sold as bounded sprints, each with a written scope agreed before payment. Advertising a single number for a complete venue launch would understate the work and create a scope problem on both sides.
Can you handle the whole launch?
I can own the U.S. securities architecture and the documents expressly listed in the engagement, and sequence the build. Where a structure depends on broker-dealer, transfer-agent, custody, commodities, bank, tax or non-U.S. law, I say so and coordinate separate signatures rather than compressing several disciplines into one nominal deliverable. A technical smart-contract audit is an engineering engagement, not a legal one, and the Order's auditability condition assumes you will have one.
What happens when the rules move?
They will. The relief is temporary and conditional, it expires on 17 September 2031 unless the Commission acts, and the Commission has asked for comment on every condition — including whether the tiering and the specific caps are right. Separately, the proposed transfer-agent overhaul would change the recordkeeping layer underneath all of this, and it is only a proposal. An architecture built to conditions has to be able to move when the conditions do, and that is a design requirement, not an afterthought.
Do I have to get on a call?
No. These are written engagements: you get a written deliverable you can circulate to your board, your engineers and your counterparties, and written revision rounds. That is deliberate. A recorded conclusion you can forward is worth more than an hour of my voice.
Official sources
Primary sources, with what each one actually is. The framework on this page was read from the Order itself, not from secondary coverage.
One development to watch, not to rely on. The SEC has proposed a comprehensive modernisation of the transfer-agent rules that expressly contemplates blockchain-based recordkeeping, including letting a distributed ledger serve as the master securityholder file. It was published in the Federal Register on 4 September 2026 with comments due 3 November 2026. It is a proposal. Nothing in it is operative law, and no structure should be built on the assumption that it will be adopted as proposed.