SEC grants five-year exemption to trade tokenized NMS stocks via permissioned AMMs

4 min

The U.S. Securities and Exchange Commission issued a temporary, conditional exemption that allows qualifying Tokenized Securities Venues to operate outside the statutory “exchange” definition so they can trade tokenized National Market System stocks via permissioned automated market makers and liquidity pools. A companion exemption grants certain liquidity providers conditional relief from “dealer” classification when supplying tokenized stock liquidity. The framework is technology-neutral and does not name XRP, Ripple, or the XRP Ledger.

Scope and Conditions

Function: A Tokenized Securities Venue brings together buyers and sellers of tokenized NMS stocks by operating permissioned AMM liquidity pools and setting access standards.
Dealer relief: Liquidity providers supplying proprietary capital to eligible pools receive conditional dealer-status relief. The exemption is not a blanket license for dealing.
Investor rights parity: Tokenized stocks must convey the same rights as the underlying shares, including dividends and voting.
Issuer notice: If an unaffiliated party tokenizes a company’s stock, the issuer must be notified and allowed to object.
Market integrity: Trading must halt on the token venue whenever the underlying stock is halted on its primary exchange.
Duration: Five-year pilot from September 17, 2026, to September 17, 2031, positioned as an interim measure pending further rulemaking.

🚨 TODAY: The SEC issued an order granting temporary, conditional exemptive relief to Tokenized Securities Venues from the definition of “exchange” in the Exchange Act to trade tokenized NMS stock using innovative permissioned automated market makers and liquidity pools. pic.twitter.com/VDi7Oty2d9

— U.S. Securities and Exchange Commission (@SECGov) September 17, 2026

XRPL Context: Infrastructure Relevance

The order acknowledges that permissioned AMM liquidity pools can operate within a regulated on-chain securities-trading structure. XRPL’s relevance stems from existing infrastructure rather than regulatory approval. Its XLS-30 amendment activated on March 22, 2024, embedded AMM functionality into the ledger’s native DEX with:

Protocol-level AMMs: Users create pools, add liquidity, and receive LP tokens.
Smart routing: Trades route to AMM or order book based on price.
Operational track record: More than two years of live, protocol-level AMM by the start of the SEC pilot window.

The SEC order does not designate XRPL as a Tokenized Securities Venue, authorize tokenized stocks on XRPL, or approve XRP. Any compliant venue would still need to meet the order’s permissioning, rights parity, issuer notice, and halt-synchronization requirements. Issuer participation, venue compliance, and institutional adoption remain open questions.

Spent the morning reading the SEC order that dropped yesterday. It's bigger than the headline.

What it is. A five year pilot that lets U.S. listed stocks trade as tokens on public blockchains, through AMM liquidity pools (the same pool design crypto already uses for swaps).

The… pic.twitter.com/6P2X8KwFx4

— 𝐆𝐫𝐚𝐩𝐞 (@RealGrapedrop) September 18, 2026

Implications

Policy signal: The SEC recognizes permissioned AMM pools as components of compliant tokenized equity trading.
Infrastructure positioning: Networks with mature AMM and DEX tooling, including XRPL, are positioned for potential participation if they meet permissioned-venue criteria.
Limits: The pilot is time-bound and conditional. It does not broaden to unpermissioned environments and does not resolve broader questions around issuer engagement or institutional adoption.

Related developments mentioned include tokenized fund products and growth in real-world asset issuance, while regulatory compliance pathways for venues and issuers remain to be tested at scale.