SEC Trading & Markets Director Prioritizes Tokenized Securities

SEC Director of the Division of Trading and Markets Jamie Selway outlined priorities for developing a framework for trading tokenized securities.

In remarks at a meeting of the Security Traders Association of Chicago, Mr. Selway shared the agency's approach to developing a framework for investors to access tokenized securities. He stated that the Division engaged with both traditional incumbents and new entrants regarding "primary issuance, secondary trading, and custody." Mr. Selway stated that the SEC "touchstone" is "innovation without arbitrage" to ensure that changes in policies do not harm the existing, well-functioning marketplace. He cited recent "'no action' letter[s] to the DTC for its tokenized security services, [and] staff statements on custody and trading." He stated that the SEC will be working on "rulemaking proposals, starting with financial responsibility, record keeping, and market structure." 

Mr. Selway also said that the agency must harmonize rules with the CFTC and that the "agencies must work in lockstep to transform dual regulation from a source of confusion into a source of strength." Mr. Selway noted that "digital assets and event contracts present opportunities for partnership," alongside the critical need to streamline rules for traditional markets.

Further, Mr. Selway described growing interest in 24-by-7 equity trading from retail investors and non-U.S. corporate clients. He noted that the global capital marketplace and many digital asset platforms already operate on this schedule. Mr. Selway said the Division intends to support industry initiatives to move equity markets in this direction to ensure investors benefit from these changes.