The SEC issued a five-year conditional exemption letting tokenized National Market System stock trade onchain through permissioned liquidity pools, and the CFTC opened introducing-broker relief to passive software providers the same morning. Both moves came days after the Senate blocked the CLARITY Act. Uniswap's UNI token rose 19.8% over 24 hours the same day.
The Securities and Exchange Commission granted temporary, conditional relief from the definition of "exchange" to a new category it calls a Tokenized Securities Venue, letting tokenized National Market System stock trade onchain through permissioned liquidity pools. The Commodity Futures Trading Commission, through its Market Participants Division, told passive software providers they need not register as introducing brokers.
Neither action came from Congress, and neither is permanent. The SEC order expires five years after publication, and the Commission can amend or withdraw it before then. The moves followed a 49-50 Senate vote that blocked cloture on the CLARITY Act, eleven votes short of the 60 required.
Caps limit onchain trading
The order exempts venues from the exchange definition and certain liquidity providers from the dealer definition. It grants no relief from antifraud provisions and permits no primary issuance. Trading is capped: a venue may list 75 Tier 1 symbols — S&P 500 and Russell 1000 stocks and certain exchange-traded products — and trade up to 0.25% of the prior month's average daily volume in each.
Tier 2 covers up to 250 remaining NMS stocks at a 2.5% cap. Breaching a volume cap triggers a three-month trading pause in that security. Venues must run publicly auditable smart contracts on public ledgers and halt trading whenever the primary listing exchange halts the underlying stock.
According to SEC Chairman Paul Atkins: "Congress was unsuccessful in advancing the CLARITY Act despite the tireless efforts of many."
Issuers can block a listing
The order covers stock tokenized by the issuer or by an unaffiliated third party, but excludes instruments offering synthetic exposure through a security-based swap. Before listing a third-party tokenized stock, a venue must notify the issuer in writing, and the listing is barred if the issuer objects within 30 calendar days. Commissioner Hester Peirce distinguished the order from decentralized finance, saying it does not cover permissionless peer-to-peer trading.
Uniswap Labs launched Permissioned Pools on v4 in July, the permissioned automated market maker architecture the order contemplates. UNI traded at $7.37 on Thursday afternoon, up 19.8% over 24 hours, according to CoinGecko.
Industry split over scope
The CFTC's new letter extends a position first granted to Phantom Technologies in March, opening the same no-action path to other passive software providers under ten conditions. Blockchain Association CEO Summer Mersinger welcomed the SEC order as a step toward modernizing U.S. capital markets.
The Securities Industry and Financial Markets Association had argued against broad relief, warning that categorical exemptions risk creating parallel, but unequal trading ecosystems. The SEC is soliciting comment on the exemption, with the deadline set once the order publishes in the Federal Register.
Source: The Defiant
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