SEC Approves Round-the-Clock Trading for Tokenized Stocks
The U.S. Securities and Exchange Commission (SEC) has approved a new exemption allowing tokenized stocks to trade around the clock under specific conditions, marking a significant step toward continuous trading in traditional markets. The five-year 'innovation exemption' was announced alongside an SEC roundtable on 24/7 trading and follows the failure of the Clarity Act in the Senate. While this move does not directly impact mutual funds or ETFs, it signals regulatory openness to tokenization and extended market hours. Industry leaders have mixed reactions. Some asset managers see tokenization as a way to meet investor demand for digital assets, particularly among younger demographics who may be more familiar with blockchain technology than traditional financial products. However, critics warn of potential risks such as increased volatility during off-hours trading and the need for stronger consumer protections in this new regime. The exemption could lead to market dislocations when regulators are not actively monitoring trades, raising concerns about oversight and investor behavior. Brokers like Charles Schwab already offer limited 24/5 ETF trading outside traditional exchanges, but broader adoption of round-the-clock stock trading may require additional safeguards.
Topics: 24/7 trading innovation exemption SEC tokenized stocks