NYSE Proposes Rule Overhaul To Enable Tokenized Stocks And ETFs Under DTC Pilot
New York Stock Exchange (NYSE) has submitted a proposed rule change to the US Securities and Exchange Commission (SEC) looking for permission for tokenized variations of eligible shares and exchange-traded funds to commerce on the alternate below a three-year Depository Trust Company pilot program.
Under the submitting, a tokenized safety would want to match its conventional counterpart in key respects, together with the CUSIP, ticker image, rights, privileges, and fungibility, whereas buying and selling would happen on the identical order guide and observe the identical execution precedence guidelines as normal securities. Clearing and settlement would proceed by way of DTC on a T+1 foundation.
The proposal would create Rule 7.50 for tokenized securities and amend a number of present provisions overlaying definitions, order dealing with, routing, execution, clearing, and settlement. The alternate mentioned its present rulebook doesn’t present a mechanism for tokenized securities to commerce on this format.
The submitting is linked to a DTC pilot program referenced in a December 11, 2025 SEC employees no-action letter and would apply solely to securities and member corporations that qualify for that program. In the submitting, the alternate described the eligible corporations as DTC Eligible Participants and the qualifying property as DTC Eligible Securities, which can embrace accepted equities and exchange-traded merchandise.
NYSE Proposal To Position Tokenized Securities Within Existing Market Structure
According to the alternate, tokenized securities would stay a part of the nationwide market system relatively than being moved to a separate blockchain venue. Orders would nonetheless be entered by way of the NYSE, with token-based clearing and settlement used solely when an eligible participant selects that possibility at order entry.
The alternate additionally mentioned the mannequin is meant to permit the tokenized and standard variations of a safety to coexist on the identical guide, relatively than making a parallel market.
The submitting argues that present US securities regulation can accommodate tokenized devices with out requiring a separate market construction. It additionally locations the proposal within the context of earlier market transitions, together with decimalization, digital buying and selling, and exchange-traded funds.
At the identical time, the doc notes that tokenization would introduce new operational, custody, compliance, settlement, tax-reporting, and pricing issues, significantly if the mannequin have been later utilized past extensively traded listed securities to thinner or harder-to-value property.
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