Nasdaq, a leading global stock market ranked second in market capitalization, is pursuing permission from U.S. financial regulators to offer trading in securities represented as digital tokens.
Nasdaq submitted a formal request on Monday to the Securities and Exchange Commission (SEC). This request involves a proposed alteration to current regulations, intended to pave the way for the listing of tokenized stocks.
The stock exchange operator is specifically seeking revisions to certain regulatory aspects, notably the definition of what constitutes a security. The aim is to subject tokenized stock trading to the same guidelines and documentation requirements as conventional securities trading, contingent upon the tokenized versions being considered equivalent.
Reports from Bloomberg indicate that Nasdaq’s application to the SEC extends beyond a simple procedural adjustment, touching upon fundamental aspects of stock issuance and settlement procedures.
Clear Labeling Essential for Tokenized Assets
A key change Nasdaq has requested from the SEC involves clearly labeling tokenized assets. This ensures that all relevant parties, including those involved in clearing and settlement processes such as the Depository Trust Company, can handle these transactions correctly.
Furthermore, Nasdaq has stated that order execution for tokenized assets will be prioritized identically to that of traditional stocks traded on the exchange.
If the SEC approves Nasdaq’s request, regulated U.S. exchanges could list shares represented as tokens, potentially improving the trading activity in blockchain-based versions of more traditional securities.
This is a developing situation; more details will be provided as they emerge.
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