The future structure of U.S. securities markets could look dramatically different if digital asset firms get their way. Securities and Exchange Commission (SEC) Chair Paul S. Atkins signaled yesterday that fundamental market structure rules, including Regulation NMS (National Market System) requirements that have governed equity trading for two decades, will likely be revised or exempted for tokenized securities trading.
At stake is whether the same protections that apply to traditional stock trading will extend to versions based on distributed ledger technology. The rules in question include best execution requirements, consolidated price transparency, and the separation of trading from custody. “With Reg NMS and those sorts of rules regarding trading of securities, not all of them really make sense in a tokenized on chain world, so we will have to make changes there,” Atkins said during the Blockchain Association Policy Summit.
The regulatory accommodation is likely to come soon and follows Tuesday’s CFTC action granting crypto exchange Coinbase most of its requested no-action relief for crypto collateral. However, the securities market changes carry far greater implications given the scale of U.S. equity markets and the investor protections built into existing frameworks.
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