SEC Eyes Regulatory Path for 24/7 Tokenized Stock Trading

SEC Chair Paul Atkins has signaled support for using exemptive authority to bring more financial activity onto blockchain networks. Under the proposed framework, approved venues could offer digital shares that trade outside the traditional 9:30 a.m. to 4 p.m. business window, potentially enabling continuous activity on nights, weekends, and holidays. Commissioner Hester Peirce previously indicated that staff were developing a narrow exemption to facilitate this limited trading, distinct from broader proposals discussed by the agency’s Investor Advisory Committee.

Despite the push for modernization, the SEC maintains that tokenization does not alter the legal status of an asset; a token representing a public share remains a security. Regulators face significant hurdles, including determining how brokers manage best execution and price discovery when the underlying market is closed. Concerns regarding third-party structures—which may lack the direct ownership rights or dividend claims of issuer-backed tokens—have prompted calls for strict disclosure requirements. While the Depository Trust Company and Nasdaq have already launched limited, regulated pilot programs, a broader framework for continuous, on-chain trading remains under development.