NYSE Arca Proposes Rules to Enable Tokenized Securities Trading

NYSE Arca proposed changing its rules to allow tokenized securities trading.

In its filing with the SEC, NYSE Arca proposed adopting and amending its rules to enable trading of securities in tokenized form during a three-year pilot program operated by the Depository Trust Company.

In the notice, published in the Federal Register, the SEC said the proposal mirrors rules that the SEC approved for Nasdaq in March 2026, consistent with a staff no-action letter dated December 11, 2025. Under the proposal, eligible securities are limited to Russell 1000 Index constituents and major-index exchange-traded funds. Further, tokenized and traditional shares must trade on the same order book under the same execution priority, provided they share the same CUSIP, trading symbol, and shareholder rights. NYSE Arca explained that a participating firm selects a "tokenization flag" at order entry to designate tokenized settlement; if the firm or security does not qualify, the trade settles in traditional form. All existing Exchange rules - including T+1 settlement, short sale rules, and market surveillance - apply without modification.

The rule change took immediate effect and becomes operative 30 days after filing. Comments are due on or before May 27, 2026. NYSE Arca said it will issue a Trader Update at least 30 calendar days before tokenized trading commences.