Hester Peirce leaves the SEC on 2 October with the tokenised stock exemption she wrote still untested
Updated: Oct 7
Hester Peirce, the Securities and Exchange Commission member who designed the permission now governing tokenised share trading in the United States, announced on 25 September 2026 that she leaves the agency on 2 October. She published her resignation letter on X that Friday afternoon, and said the role had been the honour of her professional lifetime.
Her exit takes the Commission down to two members, Chairman Paul Atkins and Commissioner Mark Uyeda. Agency rules let two members act as a quorum, the minimum number needed to take decisions, so the SEC can keep functioning. No nominee has been named to replace her. Peirce's second five-year term expired in June 2025 and she stayed on in a holdover capacity, the arrangement that lets a commissioner continue serving after a term ends.
She leaves a valuable legacy of progress. On 17 September 2026 the Commission granted what it called an innovation exemption for tokenised securities venues. An exemption is a formal permission to operate without the registration a rule would otherwise demand, and this one runs for five years. It lets platforms trade tokenised versions of listed shares without registering as exchanges. Atkins said the tokens must give holders the same rights as the traditional securities, including dividends and voting. Synthetic tokens, meaning contracts that track a share price without conveying ownership of it, are excluded.
The rules the exemption was meant to lead to
Two days before she announced she was going, Peirce described her own work to an industry audience. Speaking at SIFMA's Digital Assets Conference on 23 September 2026, she called the exemption "a time- and size-limited exemption to facilitate the trading of tokenized securities on crypto networks via automated market makers", and then "a bridge toward durable rulemaking". The Commission's goal, she said, is "a final ruleset governing the intermediaries and venues that facilitate the trading of tokenized securities in ways not envisioned by the existing regulatory framework".
Those final rules have not been written. No venue has yet filed the notice the exemption requires. The temporary permission is in place, the permanent regime it was meant to lead to is not, and the commissioner who built the first and argued for the second leaves in a week.
At the same conference Peirce put the stakes in competitive terms. "Tokenization is coming, and I would rather it happen here than have overseas markets offer tokenized exposure to U.S. equities without a domestic alternative," she said. That is an argument about which market captures the trading, and it is worth a UK reader's attention because it reads the same way from the other direction.
Two regimes, two different ways of failing
The comparison worth making is not which regulator is friendlier. It is what kind of instrument each one has reached for. The Bank of England runs the Digital Securities Sandbox, a statutory regime with a public dashboard naming every approved firm and the date of its approval. Two firms have reached the second of its approval stages: HSBC Bank on 13 July 2026 and ClearToken CSD on 18 September 2026. The FCA and the Bank have separately published a route from that sandbox towards permanent market rules.
A sandbox permission sits on a supervisory record held by a named authority, and it is changed by an identifiable act that can be seen and dated. An exemption is a policy position. A Commission can narrow it, attach conditions to it, decline to defend it or simply let it expire, and the member most committed to this one is going. Neither instrument is safer in the abstract. They fail in different ways, and a company deciding where its share register should sit needs to know which kind of failure it would be exposed to.
Neither the FCA nor the Bank of England has said what it would make of a UK company whose shares were tokenised on a United States venue under the exemption, and the question has not been put to either of them in public. As of 27 September 2026 the SEC newsroom carried no statement about Peirce's departure at all. The last item it published from her was the 23 September speech, and every account of her leaving traces back to the letter she posted herself.
What to watch next
The five-year term of the exemption is the least useful number in this story. Five years is long enough for almost anything, including for the permission to be replaced by something considerably narrower. What matters is whether the Commission writes the durable rules Peirce described, and a two-member body with no third nominee is not well placed to push a contested ruleset through at speed. Nothing about a UK company's position changes this week. The United States route to tokenised trading of listed shares stays open, it stays temporary, and it is now in the hands of people who did not build it.
Key takeaways
Hester Peirce announced on 25 September 2026 that she leaves the Securities and Exchange Commission on 2 October, taking it down to two members with no nominee named.
She designed the innovation exemption granted on 17 September 2026, a five-year conditional permission that lets venues trade tokenised listed shares without registering as exchanges.
Two days before announcing her departure she called that exemption "a bridge toward durable rulemaking". The durable rules have not been written and no venue has filed a notice.
The UK route is built differently. The Bank of England's Digital Securities Sandbox is a statutory regime with a published record, and two firms have reached its second approval stage: HSBC Bank on 13 July 2026 and ClearToken CSD on 18 September 2026.
Neither the FCA nor the Bank of England has said how it would treat a UK company whose shares were tokenised on a United States venue under the exemption.
How we got here
Peirce was first appointed to the Commission in 2018. Her second term expired on 5 June 2025, and she led the SEC's Crypto Task Force, set up to clarify how federal securities law applies to digital assets. Her exit was signalled well in advance. Regent University School of Law announced in May 2026 that she would join it as an associate professor from November 2026, and in June she told the US Chamber of Commerce Capital Markets Summit that she was leaving Washington.
The exemption itself is narrower than its headline. It covers tokenised NMS stocks listed on US national securities exchanges, traded through automated market makers on what the order calls Tokenized Securities Venues. Tier 1 covers S&P 500 and Russell 1000 constituents and certain exchange traded products, capped at 75 symbols and 0.25 per cent of the prior month's average daily share volume. Tier 2 covers other eligible NMS securities, capped at 250 symbols and 2.5 per cent.
Venues must be US persons, give 30 days' public notice before they start, run auditable smart contracts on a public, permissionless ledger and halt trading whenever the underlying stock halts on its primary exchange. Where someone other than the issuer tokenises a stock, the venue must notify the issuer in writing and give it the chance to object before trading begins. The SEC has also asked for comments on whether the relief should be made permanent.
What it means for UK founders
For most UK companies the exemption is a reference point rather than a route. It applies only to stocks listed on US national securities exchanges, and the venues must themselves be US persons, so an unlisted UK company cannot use it. A UK company with a US listing would, however, have the notice and objection right, which is worth knowing before a third party tokenises its stock.
For private UK companies the relevant routes remain domestic: PISCES for intermittent trading in private company shares, and the Digital Securities Sandbox for blockchain based trading and settlement. On the US side, the comment process on permanent rules is the thing to follow now that the exemption's main author has gone. Founders may want to take professional advice before relying on either regime.
Key facts at a glance
Peirce joined the SEC in 2018; her second term expired on 5 June 2025.
17 September 2026: the SEC approved the innovation exemption, available for five years unless extended or replaced by permanent rules.
Tier 1 cap: 75 symbols and 0.25 per cent of prior month average daily volume. Tier 2 cap: 250 symbols and 2.5 per cent.
Venues must give 30 days' public notice before starting operations.
November 2026: Peirce joins Regent University School of Law as an associate professor.
Further reading
Frequently asked questions
When does Hester Peirce leave the SEC?
Hester Peirce announced on 25 September 2026 that she leaves the Securities and Exchange Commission on 2 October 2026. Her second five-year term had expired in June 2025 and she had stayed on in a holdover capacity.
Can the SEC still make decisions with only two commissioners?
Yes. Agency rules let two members act as a quorum, so the SEC can keep functioning with Chairman Paul Atkins and Commissioner Mark Uyeda. No nominee has been named to replace Peirce.
What is the SEC innovation exemption for tokenised securities?
Granted on 17 September 2026, it is a five-year permission that lets platforms trade tokenised versions of listed shares without registering as exchanges. The tokens must give holders the same rights as the traditional securities, including dividends and voting, and synthetic tokens are excluded.
Has any trading venue used the SEC tokenised securities exemption yet?
No venue had filed the notice the exemption requires at the time of Peirce's departure, and the durable rules she described as the goal have not been written.
How does the UK Digital Securities Sandbox differ from the SEC exemption?
The Bank of England's Digital Securities Sandbox is a statutory regime with a public dashboard naming every approved firm and its approval date, whereas the SEC exemption is a policy position the Commission can narrow, condition or let expire. HSBC Bank and ClearToken CSD have reached the sandbox's second approval stage.
This is general information, not legal, tax or investment advice.
Sources
CoinDesk, "U.S. SEC's steadiest crypto advocate, Hester Peirce, to depart next week", 25 September 2026. American Banker, "SEC Commissioner Peirce to leave agency", 25 September 2026. Crowdfund Insider, "SEC Commissioner Hester Peirce Shares Departure Letter as She Moves on From the Commission", 25 September 2026. Securities and Exchange Commission, "Looking for Change in Haystacks: Remarks before SIFMA's Digital Assets Conference", Hester M. Peirce, 23 September 2026. CoinDesk, "SEC rolls out long-awaited innovation exemption for tokenized securities venues", 17 September 2026. Bank of England, Digital Securities Sandbox dashboard, accessed 27 September 2026.
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