"Nasdaq Inc. is asking regulators to let investors trade tokenized versions of stocks on its exchange, a move that could mark the first big test of blockchain technology inside the core of America's equity markets. The exchange operator is seeking approval from the US Securities and Exchange Commission to amend certain rules, including the definition of a security, that would allow stocks to be tokenized and traded on regulated venues like Nasdaq, according to a filing Monday."
"The firm suggests shares of a tokenized security should trade on Nasdaq and other exchanges under the same rules of execution and documentation if it's considered equal to and has the same shareholder rights as the underlying security. The company also proposes that tokenized assets are clearly labeled as such, so participants that want to clear and settle their trades and the Depository Trust Company that handles clearing and settlement will carry out the order, Nasdaq said in the filing."
Nasdaq filed a request with the SEC to amend rules, including the definition of a security, to permit tokenized shares to be traded on regulated exchanges. The proposal envisions tokenized securities trading under identical execution rules and documentation when they confer equal shareholder rights to underlying shares. Tokenized assets would be clearly labeled to enable clearing and settlement by market participants and the Depository Trust Company. The proposal guarantees the same execution priority for tokenized orders as for traditional assets. The filing raises foundational questions about how stocks are defined, issued, and settled, and seeks to leverage existing market infrastructure.
Read at www.mercurynews.com
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