SEC advisory panel advises against regulatory exemptions for tokenized stocks

A subcommittee of the U.S. Securities and Exchange Commission's (SEC) Investor Advisory Committee (IAC) has recommended against granting an innovation exception for tokenized stocks, which would exempt them from certain regulations under specific conditions. The Market Structure Subcommittee emphasized that while tokenized stocks using blockchain and distributed ledger technology (DLT) can enhance settlement efficiency, reduce costs, and improve transparency, safeguards must be guaranteed. These include clear disclosures on investor rights and mechanisms to ensure compliance with regulatory oversight.