- The SEC has been preparing an “innovation exemption” that would let firms trade versions of listed shares on a before the full rulebook is rewritten. Chair Paul Atkins describes it as a cabined framework, meaning a deliberately narrow permission with conditions attached rather than a general green light.
- An executive at the tokenisation firm Securitize now says the SEC held the exemption back deliberately, to avoid complicating Senate votes on the Clarity Act. On that account the delay is about legislative timing rather than anything unresolved in the policy.
- The headline promise is trading at any hour. The less advertised part is what trading at 3am on a Sunday actually costs you.
Shares in American companies currently trade during American office hours, and have done for about two centuries. US regulators have spent months preparing to let some of them trade at any hour of any day, on a blockchain. The permission still hasn’t arrived, and one of the firms waiting on it says the reason is politics.
Two things are being conflated in most coverage of this. Putting a share on a blockchain changes how and when it moves. It does not change what you own: the same claim on the same company, the same dividend, the same vote. If someone sells you a tokenised share on the basis that it’s a new kind of asset, that’s a sales pitch rather than a description.
The second thing is that round-the-clock trading is not automatically a gift to ordinary investors. Markets have opening hours partly because concentrating everyone’s buying and selling into the same window makes prices fairer. Spread it across 168 hours a week and the quiet hours get very quiet.
What a tokenised security actually is
Start with the ordinary version. When you buy a share in a listed company, you don’t get a certificate any more. Your ownership is a line in a database kept by a central registry, and your broker holds a matching line saying that line belongs to you. Settlement, the moment the share is really yours and the money is really theirs, typically takes a day.
A tokenised security moves that record onto a blockchain: a shared, public ledger that lots of parties can read and write to without one company controlling it. The share itself is unchanged. What changes is the plumbing underneath it, and blockchains don’t close for the weekend.
That’s the whole appeal. Faster settlement, no market close, and in principle the ability to trade with someone in another timezone without three intermediaries in between.
What an “exemption” means here
This is the part the announcement rests on, and it’s easy to skim past.
US securities law was written for certificates, brokers and clearing houses. A lot of it doesn’t obviously apply to a moving on a public ledger, and rewriting it takes years. Rather than wait, the SEC is proposing to exempt certain firms from certain existing requirements, under conditions, so they can operate while the long-term rules are drafted.
Atkins has framed it as a cabined framework, which is regulator language for a small, fenced-off space. Bloomberg first reported the Commission was moving on it. Practically, that means a limited set of participants doing limited things under close supervision, not an open market anyone can join.
It also means the permission is provisional. An exemption granted while rules are being written can be narrowed, extended or replaced by those rules when they arrive. That’s a genuine risk for anyone building on top of it, and it’s the reason firms have been lobbying for a proper rulebook rather than a temporary carve-out.
Why it hasn’t landed yet
The rulebook in question is the Clarity Act, the crypto market structure bill working its way through Congress. Its purpose is to settle in law which regulator supervises what, rather than leaving the answer to exemptions and case-by-case enforcement, and it is currently in the Senate’s hands.
Redfearn, an executive at the tokenisation firm Securitize, told The Block that the SEC held the exemption back to avoid complicating those Senate votes. The logic is that a regulator handing out permissions in the middle of a legislative fight over the same subject gives senators a reason to argue about whether the legislation is needed at all.
Treat that as an interested account rather than an established fact. Securitize tokenises assets for a living and stands to gain when the exemption arrives, and the SEC has not said publicly that the timetable was set by politics. Nobody at the Commission has confirmed the delay was deliberate.
Even so, it changes what the wait means. A delay caused by conditions that are hard to draft resolves itself when the drafting is done. A delay tied to a vote in the Senate resolves when the Senate decides to move, which is not something the SEC or the firms waiting on it control.
The honest version of 24/7 trading
Now the bit that gets left out.
Liquidity is the depth of buyers and sellers waiting to trade at any given moment. When it’s deep, you can buy or sell a decent amount without shifting the price much. When it’s thin, you can’t. The spread, the gap between what buyers will pay and what sellers will accept, is the visible symptom: wide spread means thin market means you get a worse deal.
Stock markets are deep during their opening hours because that’s when everyone shows up. Crypto markets, which already trade 24/7, are a useful preview of what happens when they don’t. Weekend and overnight liquidity is consistently thinner, spreads are wider, and price moves are sharper because it takes less money to push them.
So a tokenised share trading at 3am on a Sunday is available to you. It is not necessarily well priced for you. For a large institution running a global book, always-on markets solve a real problem. For a private investor placing a trade before bed, the convenience and the cost point in opposite directions.
Where this leaves a UK reader
Nowhere, for now, and that’s worth saying plainly because tokenised equities are already being marketed at overseas investors by platforms operating outside any of this.
The SEC regulates US markets and US investors. An SEC exemption creates no permission whatsoever for a UK resident, and the Financial Conduct Authority has its own regime for cryptoassets and its own, separate work on tokenised funds and settlement. Nothing announced in Washington changes what a UK broker is allowed to offer you.
For this to reach British investors, two things would have to happen: the FCA would need to permit tokenised trading of listed shares here, and UK-regulated brokers would need to build it. Neither is imminent.
What to watch
The Senate first. If Securitize’s account is right, the exemption follows the Clarity Act rather than leading it, so the thing to track is what happens to that bill and whether the SEC moves once the votes are out of the way. An exemption appearing while the legislation is still stuck would suggest the delay was about something else entirely.
When it does arrive, whether it comes with published conditions or just an announcement. The conditions are the story: who qualifies, what they can trade, and what protections carry across from the existing rules. An exemption with tight conditions is a controlled experiment. A loose one is something else.
Then watch the actual trading data if and when it starts. If overnight and weekend spreads on tokenised shares turn out to be materially wider than during market hours, the 24/7 pitch quietly becomes an institutional feature rather than a retail one, whatever the marketing says.