**[SEC Chairman: Building a Bridge to Durable Rules for On-Chain Trading of Tokenized Stocks]** BlockBeats News, September 17 — SEC Chairman Paul Atkins issued a statement regarding the Commission's approval of an "innovation exemption." He noted that over a week ago, Congress failed to advance the CLARITY Act, prompting the SEC to take significant steps within its statutory authority today. By facilitating on-chain trading of certain tokenized stocks, the SEC aims to bring U.S. capital markets into the digital era. The order grants two types of temporary, conditional exemptions under Section 36(a)(1) of the Exchange Act: 1. Exempting "Tokenized Securities Venues" (TSVs) from the definition of "exchange" under the Exchange Act. 2. Exempting certain liquidity providers ("regulated entities") from the definition of "dealer." Atkins emphasized that the anti-fraud and anti-manipulation provisions of federal securities laws fully apply to all securities activities in these markets, without exception. The exemptions come with several investor protection conditions: - TSVs must be U.S.-based entities and comply with OFAC sanctions regulations. - TSVs must establish permissioned access standards, allowing only specific participants to trade. - Synthetic products are prohibited—tokenized NMS (National Market System) stocks must be tokenized either by the issuer of the underlying stock or its representative, or by an unrelated third party. Token holders must enjoy the same rights as traditional securities holders (including dividends and voting rights). - Issuers retain the right to object to and prevent their securities from being traded on TSVs. Atkins stated that the Commission is not locking current technology into future standards but is instead allowing the market to evolve, monitoring its development, and using this as a basis to craft a more flexible, forward-looking regulatory framework. This exemption is a temporary measure, and the Commission is seeking public input on all aspects. Atkins stressed that this transitional arrangement must be followed by the establishment of durable rules to ensure that on-chain markets remain viable as capital markets evolve. [Original Link]