Wall Street gatekeepers to control tokenized stock access

24X National Exchange filed rule change SR-24X-2026-20 on June 11 to permit eligible members to trade tokenized forms of certain equity securities and exchange-traded products during a Depository Trust Company pilot. The SEC issued a notice of the filing on June 16 and placed it in the Federal Register on June 22.

The proposed amendments cover eligible securities, member access, order priority and routing. Under the filing, tokenized versions of an eligible security could trade on the same 24X order book as the traditional share if they are fungible with the conventional form and carry the same CUSIP, trading symbol and shareholder rights. Any instrument that does not meet those conditions would be treated as a separate product.

Members seeking tokenized settlement would mark a designated flag at order entry. That flag may include details required by DTC, such as the target blockchain and a registered wallet address. 24X would pass the instruction to DTC. DTC would execute tokenization only if the participant, the security, the blockchain and the wallet meet its eligibility criteria and operating requirements. If a condition is unmet, the trade would settle in traditional form.

The proposal depends on a DTC pilot described in a Dec. 11, 2025 SEC staff no-action letter. Under the pilot, a DTC participant can register approved blockchain addresses as registered wallets. If the participant elects tokenization, DTC would debit the participant’s entitlement, credit a Digital Omnibus Account and mint a token representing that entitlement to the participant’s registered wallet. Cede & Co., DTC’s nominee, would remain the registered owner of the underlying securities. DTC would use an off-chain system called LedgerScan to monitor wallet activity and to serve as its official books and records for tokenized entitlements.

The pilot sets eligibility limits and reporting requirements. Securities named as eligible in the no-action letter include Russell 1000 stocks, U.S. Treasuries and major-index ETFs. Tokenized entitlements do not receive collateral or settlement value under DTC’s risk controls. DTC must report quarterly to SEC staff, and the staff’s position is scheduled to withdraw three years after launch unless the framework changes.

The filing references a previously approved Nasdaq proposal as a model for a DTC-compatible exchange approach. Before tokenized trading on 24X could begin, the exchange must identify which securities will be eligible and DTC must determine approved participants, blockchains and wallets. The filing ties tokenized trading to existing exchange and DTC rules and operating limits, making tokenized settlement conditional on those approvals.