Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing of a Proposed Rule Change, as Modified by Amendment No. 2, To Amend the Exchange's Rules To Enable the Trading of Securities on the Exchange in Tokenized Form
Published Date: 1/30/2026
Notice
Summary
Nasdaq is updating its rules to let people trade stocks and securities in a new, digital way called tokenized form—think of it like turning shares into digital tokens. This change affects investors and companies using Nasdaq, making trading faster and more modern. The SEC is reviewing this update, with decisions and public comments happening through early 2026, potentially opening the door to a fresh era of trading.
Analyzed Economic Effects
9 provisions identified: 4 benefits, 4 costs, 1 mixed.
Nasdaq will permit tokenized securities trading
Nasdaq proposes rule changes so securities may be traded on the Exchange in tokenized form under a DTC tokenization pilot authorized by the SEC No-Action Letter dated December 11, 2025. The proposal lets eligible Nasdaq members and investors trade tokenized versions of certain listed equities and ETFs on Nasdaq subject to the pilot's terms.
DTC participants must register and use approved wallets
To trade or settle tokenized securities under the DTC pilot, a market participant must be a DTC Eligible Participant, register with DTC, and obtain one or more wallet addresses on a DTC‑approved blockchain. DTC currently states it has U.S. tax withholding or TIC reporting obligations for roughly 11 percent of its participants and may delay offering services to those participants until compliance questions are resolved.
Tokenized trading stays within national market system
Nasdaq says tokenized DTC Eligible Securities traded on its market will be integrated into the national market system: trades will be reported to the SIP, market surveillance will rely on the same data accessible to Nasdaq and FINRA, and tokenized trading is intended not to degrade the National Best Bid and Offer (NBBO).
Only Russell 1000 and major ETFs eligible
Under the DTC pilot described in the rule change, DTC Eligible Securities will be limited to (i) securities in the Russell 1000 Index at launch (and additions after launch) and (ii) ETFs that track major indices such as the S&P 500 and Nasdaq-100. Only those listed categories may trade in tokenized form on Nasdaq under this proposal.
Tokenized and traditional shares treated the same
Nasdaq states that a tokenized DTC Eligible Security will trade on the same Nasdaq Order Book, with the same execution priority, order types, routing options, market data, and fee schedule as its traditional counterpart—provided the tokenized share is fungible, shares the same CUSIP and symbol, and affords the same rights. Nasdaq says its pricing structure and rates will not vary based on tokenization.
Settlement stays on T+1 schedule
Trades in tokenized securities handled by DTC under the pilot will continue to settle on a T+1 basis, the same post-trade settlement timeline Nasdaq uses today.
Participants must flag tokenization preference
A DTC Eligible Participant who wants an executed order in a DTC Eligible Security to clear and settle in token form must select a tokenization flag when entering the order; Nasdaq will communicate that flag and any attendant instructions to DTC on a post‑trade basis. Nasdaq currently will not validate DTC eligibility at order entry (it says it intends to develop that functionality later).
DTC pilot timing and three‑year duration
DTC expects its tokenization process may be available in the second half of 2026. DTC will provide tokenization services on a pilot basis for a period of three years after launch, after which it will sunset the service. Nasdaq will publish trader alerts and will notify Members at least 30 calendar days before trading tokenized securities begins on the Exchange.
DTC restricts supported blockchains and conversions
DTC will only support blockchains that meet its standards for things like transaction reversal and resiliency and expects to publish its list of supported blockchains and blockchain standards. DTC's process may require de‑tokenization or forced conversion to receive distributions or corporate action items.
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