NYSE seeks SEC approval to trade tokenized stocks and ETFs

The New York Stock Exchange asked the Securities and Exchange Commission to approve a rule change that would let tokenized shares and tokenized exchange-traded products trade on the exchange. The filing would create Rule 7.50 for Tokenized Securities and amend Rules 1.1, 7.36, 7.37 and 7.41. The SEC has published the filing and opened a public comment period.

Under the proposal, eligible member firms could elect token settlement for qualifying securities at order entry while trades continue to execute on the NYSE’s existing order book. The change depends on a Depository Trust Company pilot and a Dec. 11, 2025 SEC staff no-action letter. Only broker-dealer members that can participate in that DTC pilot would be able to use token settlement, and only securities that meet the pilot’s eligibility criteria would qualify.

The filing refers to participating firms as DTC Eligible Participants and to eligible assets as DTC Eligible Securities. Approved equities and exchange-traded products are among the candidates mentioned in the proposal. The exchange described the plan as following a similar path to a recent Nasdaq filing and said it would not create a separate blockchain trading venue; trades would remain inside the national market system while DTC would clear and settle tokenized positions when an eligible firm elects that option.

The proposal requires the tokenized version and the standard version of a security to coexist on the same order book only if they are identical in key respects. The filing requires the tokenized security to carry the same CUSIP and ticker, be fungible with the regular class and provide the same rights and privileges for holders.

The filing lists operational and market risks market participants would face. Brokers, custody providers, transfer agents, compliance teams and back-office staff would need new custody models, settlement processes and recordkeeping tied to blockchain-based tokens. The exchange said smaller firms or clients unfamiliar with the technology could face higher costs or operational hurdles.

The filing also highlights market risks. Tokenized secondary markets can show sharp price swings, and valuations may be difficult for thinly traded or unique assets. Tax reporting could become more complex if blockchain records, broker files and tax forms do not align.

Custody and control of tokenized securities are flagged as risks. Loss, theft or mismanagement of private keys or token accounts could result in asset loss in ways that differ from traditional custody failures. The filing notes components of the existing U.S. clearing and settlement infrastructure may not map neatly to tokenized records, creating points of friction or failed linkages.

The SEC’s notice invites public comment on the proposed rule changes and their potential effects on market structure, investor protection and clearing and settlement. If the SEC approves the changes, tokenized versions of regulated securities would be integrated into existing NYSE market operations rather than run on a separate blockchain-native trading lane.