SEC Brewing New Exemption Rules for Tokenized Securities, Regulatory Framework May Face Key Adjustments

On March 13, U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce stated that regulators are developing an innovative exemption mechanism for tokenized securities, but its scope will be significantly narrower than the previously discussed “comprehensive” regulatory exemption plan. This statement was made during the SEC Investor Advisory Committee (IAC) meeting, sparking market attention on the future regulatory policy for tokenized securities in the U.S.

Hester Peirce pointed out that SEC staff are currently exploring a more limited exemption arrangement aimed at providing a controlled trading environment for certain tokenized securities while safeguarding investor rights. This plan does not involve a complete relaxation of existing securities regulations but allows for limited market experiments under strict conditions to gather experience for future regulatory rules.

Earlier, the Market Structure Subcommittee of the SEC Investor Advisory Committee submitted comments on February 26, explicitly opposing a full exemption for tokenized securities. The committee argued that if digital asset securities are completely detached from the current securities regulatory framework, it could weaken key investor protections such as ownership disclosure, responsibilities of regulatory intermediaries, and trading order safeguards similar to those in traditional stock markets.

The subcommittee recommended that regulators proceed with rule-by-rule reforms and conduct public consultations before formal implementation. In their letter, they noted that equity security tokenization is still in its early stages and involves complex technological evolution, making principle-based regulatory suggestions more practical at this stage.

While regulatory discussions are ongoing, the IAC also acknowledged that tokenized securities have certain potential advantages, such as enabling “atomic settlement” via blockchain, which could shorten settlement cycles and reduce intermediary risks. Additionally, real-time on-chain data may help establish more transparent communication mechanisms between companies and shareholders.

SEC Chairman Paul Atkins also stated at the same meeting that the agency expects to review related innovative exemption plans soon. These measures could serve as transitional regulatory tools, ensuring investor protection while exploring digital securities trading models in the U.S., and laying the groundwork for a long-term regulatory framework in the future.