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The SEC Has Set Out a Framework for Tokenised Stock Trading. The Implications Will Reach Well Beyond the US

  • Writer: Shawn Jhanji
    Shawn Jhanji
  • May 19
  • 4 min read
For UK founders and investors watching the tokenisation of equity markets, the latest of yet another clear signal that this space is being given a real regulatory foundation, arrived from Washington on 18 May 2026. Bloomberg Law reported that the US Securities and Exchange Commission, under Chair Paul Atkins, is preparing to release a formal innovation exemption establishing a framework for trading tokenised versions of publicly listed stocks. The indication is that the SEC will publish the exemption imminently, opening a defined legal path for crypto platforms and exchanges to offer tokenised equities to investors without the full burden of traditional broker-dealer registration.

For UK founders and investors watching the tokenisation of equity markets, the latest of yet another clear signal that this space is being given a real regulatory foundation, arrived from Washington on 18 May 2026. Bloomberg Law reported that the US Securities and Exchange Commission, under Chair Paul Atkins, is preparing to release a formal innovation exemption establishing a framework for trading tokenised versions of publicly listed stocks.


The indication is that the SEC will publish the exemption imminently, opening a defined legal path for crypto platforms and exchanges to offer tokenised equities to investors without the full burden of traditional broker-dealer registration.


Like the joint FCA and Bank of England announcement on the 15th May in the UK, this is not a marginal development.


It follows a pattern of rapid regulatory action that has been accelerating since early 2026, and it signals something important: the world's largest capital markets are not just tolerating tokenised securities, they are building the legal architecture to accommodate them.


What the SEC Is Proposing

The innovation exemption creates a new framework for platforms to offer tokens that represent ownership or exposure to publicly traded companies. It is designed to allow regulated crypto platforms to list tokenised equity products within an established perimeter, without requiring them to obtain the full suite of securities licences that govern traditional broker-dealers. SEC Chair Atkins has indicated the agency is also considering formal rulemaking for onchain trading systems, blockchain settlement infrastructure and crypto custody models more broadly, framing this as keeping pace with markets that are becoming increasingly automated and AI-driven.


The exemption sits alongside a wider set of approvals that have moved quickly this year.


The SEC approved Nasdaq's rules for tokenised equities in March 2026, followed by a similar approval for the New York Stock Exchange in April 2026. Both exchanges can now list tokenised versions of select equities and ETFs alongside traditional shares. The Depository Trust and Clearing Corporation has announced it plans to begin limited production trades of tokenised real-world assets in July 2026 ahead of a full launch in October. And in one of the largest structural plays of the year, Bullish agreed in May to acquire transfer agent Equiniti for $4.2 billion, explicitly positioning the combined entity as the global transfer agent infrastructure for tokenised securities.


Why the Regulatory Architecture Matters

What is emerging in the US is not a single rule change but a layered regulatory architecture: exchange approvals, custodial frameworks, settlement infrastructure and now a formal exemption for tokenised stock platforms. Each layer reduces the legal and operational risk that has kept institutional capital cautious and kept tokenised equities at proof-of-concept stage. When the SEC establishes clear exemptions, the compliance calculus shifts for every platform that has been waiting on the sidelines.


For UK founders and investors operating in or watching the tokenisation space, this matters in two ways.


First, it creates a competitive reference point. The FCA published its own fund tokenisation rules through PS26/7 in May 2026 and the PISCES regime for private company share trading is now live with approved operators. But the US is moving to create a framework specifically for tokenised versions of public equities, and the FCA and HM Treasury will need to consider whether a comparable pathway for listed securities is necessary for UK platforms and issuers.


Second, it shifts the standard for what is considered a workable product. A tokenised equity product that operates within an SEC-approved framework carries a very different compliance profile than one that exists in regulatory ambiguity. As the US solidifies its position, UK-based institutional allocators and fund managers will start evaluating tokenised equity offerings against a US reference standard.


What the UK Needs to Do Next

The FCA and HM Treasury have moved at a credible pace on fund tokenisation and private markets infrastructure. The King's Speech 2026 included financial services legislation that streamlines the regulatory landscape. The question of tokenised public equities, specifically the ability to issue, settle and trade tokenised versions of listed UK shares on regulated blockchain infrastructure, has to a cerain degree been answered by the recent FCA / Bank of England joint statement, the intention is certainly there. However, when it comes to actions, this issue has not quite received the same treatment as funds or private markets.


The SEC's exemption creates urgency. If the US establishes a defined legal path for tokenised stock platforms in 2026 and the UK does not, the result is a straightforward competitive disadvantage for London as a capital markets centre. The FCA has the tools and the mandate. The question now is timing.


Key Takeaways

  • The SEC under Chair Paul Atkins is preparing an innovation exemption establishing a formal framework for trading tokenised versions of publicly listed stocks, with publication expected imminently.

  • The move follows SEC approvals for Nasdaq and NYSE to list tokenised equities and the DTCC's announced October 2026 tokenisation service launch.

  • The combined effect is a layered US regulatory architecture for tokenised securities that reduces compliance risk for platforms and institutional participants.

  • For UK founders and investors, the SEC framework creates a competitive reference point and raises the question of whether the FCA will move to create an equivalent framework for tokenised listed equities.

  • The tokenised equity market is transitioning from proof of concept to regulated product, and the regulatory foundation being built in Washington is the clearest signal yet of that shift.

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