US SEC Begins Review of Nasdaq Tokenized Securities Proposal

The US Securities and Exchange Commission (SEC) has initiated proceedings to review Nasdaq’s proposal to list and trade tokenized securities, including equities, on its exchange. The move follows the SEC’s issuance of a no-action letter to the Depository Trust & Clearing Corporation (DTCC) regarding its real-world asset (RWA) tokenization services.

According to the SEC order, the agency is seeking additional public comments to determine whether to approve or reject the proposed rule change. The commission noted that “institution of proceedings is appropriate at this time in view of the legal and policy issues raised by the proposed rule change.”

Comments received so far include support from the Securities Industry and Financial Markets Association (SIFMA), while Cboe Global Markets, Better Markets, and Ondo Finance have expressed opposition.

Nasdaq plans to enable trading of securities in tokenized form on its platform, with Galaxy Digital becoming the first Nasdaq-listed company to tokenize its common stock on Solana. The SEC’s review focuses on investor protection, market integrity, and technological safeguards, emphasizing that tokenized trading must maintain existing regulatory standards and mitigate risks such as fraud and market manipulation.

Separately, the SEC’s no-action letter to DTCC allows the tokenization of certain custody assets, a move that could support clearing and settlement of Nasdaq’s tokenized securities upon approval. The agency positions the step as bridging traditional finance (TradFi) and decentralized finance (DeFi) while advancing a more efficient global financial system.

The development follows broader U.S. regulatory activity: the Commodity Futures Trading Commission (CFTC) recently approved the use of tokenized assets as collateral in derivatives markets, launching a pilot program to test their application.