Notice2026-09739
Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Change To Amend the Exchange's Rules To Enable the Trading of Securities on the Exchange in Tokenized Form
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
May 15, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 94 (Friday, May 15, 2026)</title>
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[Federal Register Volume 91, Number 94 (Friday, May 15, 2026)]
[Notices]
[Pages 28059-28063]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-09739]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105458; File No. SR-NYSEAMER-2026-36]
Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing and Immediate Effectiveness of Proposed Change To Amend the
Exchange's Rules To Enable the Trading of Securities on the Exchange in
Tokenized Form
May 12, 2026.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on May 1, 2026, NYSE American LLC (``NYSE American'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to adopt Rule 7.39E and amendments to Rules
1.1, 7.36E, 7.37E and 7.41E to enable the trading of securities on the
Exchange in tokenized form during the pendency of a pilot program to be
operated by the Depository Trust Company (``DTC'') pursuant to the
terms of a December 11, 2025 Securities and Exchange Commission
(``Commission'') Staff no-action letter. The proposed rule change is
available on the Exchange's website at <a href="http://www.nyse.com">www.nyse.com</a> and at the
principal office of the Exchange.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to adopt Rule 7.39E (Tokenized Securities)
and amend Rule 1.1E (Definitions), Rule 7.36E (Order Ranking and
Display), Rule 7.37E (Order Execution and Routing), and Rule 7.41E
(Clearance and Settlement) to enable the trading of securities on the
Exchange in tokenized form during the pendency of a pilot program to be
operated by DTC pursuant to the terms of a December 11, 2025 Commission
Staff no-action letter \4\ (``DTC Pilot Program''). As described below,
the proposed rule change is based on the rules of The Nasdaq Stock
Market LLC (``Nasdaq'').
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\4\ See No-Action Letter Request Related to The Depository Trust
Company's Development of the DTCC Tokenization Services, dated
December 11, 2025, available at <a href="https://www.sec.gov/files/tm/no-action/dtc-nal121125.pdf">https://www.sec.gov/files/tm/no-action/dtc-nal121125.pdf</a> (the ``No-Action Letter'').
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Background and Proposed Rule Change
The proposed rule change would establish that Exchange ETP Holders
that are eligible to participate in the DTC Pilot Program (``DTC
Eligible Participants'') \5\ may trade tokenized versions of those
equity securities and exchange traded products on the Exchange that are
eligible for tokenization as part of the DTC Pilot Program (``DTC
Eligible Securities''), pursuant to the terms of the No-Action Letter.
Pursuant to the proposed changes, DTC Eligible Securities would be able
to trade on the Exchange within the current national market system,
using DTC to clear and settle trades in token form, per order handling
instructions that DTC Eligible Participants may select upon entering
their orders for DTC Eligible Securities on the Exchange.\6\
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\5\ ``DTC Eligible Participant'' would be defined in proposed
rule 7.37E(b)(10) as ``an ETP Holder that is eligible to participate
in the Depository Trust Company's (`DTC') three-year tokenization
pilot program, pursuant to its terms and those of the Securities and
Exchange Commission Staff no-action letter, dated December 11, 2025
(the `No-Action Letter').''
\6\ The Exchange is assessing various methods of tokenization
and trading of tokenized securities. If the Exchange plans to adopt
any particular alternative to the DTC approach, then it will file
rule proposals with the Commission before doing so.
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[[Page 28060]]
The Exchange's rules do not currently permit the trading of
tokenized securities on the Exchange and, unless the Exchange adopts
the proposed rules, the Exchange would lack a clear framework for DTC
Eligible Participants to designate, at order entry, that a DTC Eligible
Security be cleared and settled in tokenized form pursuant to the DTC
Pilot Program.\7\
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\7\ Nasdaq recently amended its rules to enable the trading of
securities in tokenized form during the pendency of the DTC Pilot
Program. See Securities Exchange Act Release No. 105047 (March 18,
2026), 91 FR 13900 (March 23, 2026) (SR-NASDAQ-2025-072) (Order
Approving 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) (``Nasdaq Approval Order''). See
also Securities Exchange Act Release No. 104693 (Jan. 27, 2026), 91
FR 4138 (Jan. 30, 2026) (SR-NASDAQ-2025-072) (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) (``Nasdaq Amendment No. 2'').
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The Exchange accordingly proposes to amend its rules to enable the
trading of DTC Eligible Securities in tokenized form on the Exchange
during the pendency of the DTC Pilot Program, subject to the same
conditions and restrictions as the Nasdaq rule change approved by the
Commission. The Exchange believes that the existing regulatory
structure mandated by Congress applies to tokenized securities,
regardless of whether such securities have certain unique properties
like the ability to be settled on a blockchain, much like it did when
the Commission allowed securities to be decimalized and electronified
and when exchange traded funds and other novel securities were
initially approved. The Exchange believes that no significant
exemptions or parallel market structure constructs are needed for
tokenized securities to trade alongside other securities, and that the
markets can accommodate tokenization while continuing to provide the
benefits and protections of the national market system.\8\
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\8\ Section 11A of the Act states that ``[t]he linking of all
markets for qualified securities . . . will foster efficiency,
enhance competition, increase the information available to brokers,
dealers, and investors, facilitate the offsetting of investors'
orders, and contribute to best execution of such orders'' such that
Congress directed the Commission to ``use its authority under this
chapter to facilitate the establishment of a national market system
for securities.'' 15 U.S.C. 78k-1(a). Permitting the trading of
tokenized securities on the Exchange will further these policy
objectives.
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To tackle the challenge of trading tokenized equities, the Exchange
offers a simple proposal that accommodates an approach to tokenization
that DTC is pursuing in the DTC Pilot Program. The Exchange believes
that this approach will leverage existing structures, players, and
rules in a way that is beneficial to investors and in the markets' best
interests.
The proposed rules provide that the term ``tokenized'' refers to
digital representations of paper securities that utilize digital ledger
or blockchain technology, as opposed to ``traditional'' securities,
which are also digital representations of paper securities, but do not
utilize blockchain technology. As long as DTC Eligible Securities are
fungible with, have the same CUSIP number and trading symbol as, and
afford their holders the same rights and privileges as traditional
securities of an equivalent class, the Exchange will trade DTC Eligible
Securities in tokenized form together with traditional securities on
the same order book and according to the same execution priority rules.
A tokenized DTC Eligible Security would be deemed to provide the same
rights and privileges as a traditional security if, among other things,
it conveys an equity interest in an underlying company, a right to
receive any dividends that the company issues to its shareholders, a
right to exercise any voting rights that shareholders are due, and a
right to receive a share of the residual assets of the company upon
liquidation. The Exchange will not treat tokenized instruments as
equivalent to their traditional counterparts if they do not convey such
rights or share the same CUSIP and trading symbol; instead, the
Exchange will treat these instruments as distinct (e.g., derivative
securities or American Depositary Receipts).\9\
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\9\ This rule proposal does not address whether and how the
Exchange may choose to trade these non-fungible tokenized
instruments in the future pursuant to a proposed Rule change.
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As noted above, the Exchange proposes to trade DTC Eligible
Securities within the confines of existing securities laws and rules.
All existing Exchange rules that currently apply to non-tokenized
securities will continue to apply, without modification, except as set
forth below.
To effectuate these changes, the Exchange proposes to adopt Rule
7.39E and amendments to Rules 1.1E, 7.36E, 7.37E and 7.41E, as follows.
Rule 1.1E
The Exchange proposes to amend the definition of ``Security'' in
Rule 1.1E(rr) to add a clause similar to that in Equity 1, Nasdaq
Section 1 providing that the definition of security encompasses
securities that are either listed on the Exchange or traded on the
Exchange pursuant to unlisted trading privileges. As amended, Rule
1.1E(rr) would provide as follows (proposed additions italicized):
The terms ``security'' and ``securities'' mean any security as
defined in [Rule]Section \10\ 3(a)(10) under the Securities Exchange
Act of 1934, as amended, that is either listed on the Exchange or
traded on the Exchange pursuant to unlisted trading privileges;
provided, however, that for purposes of Rule 7E, such terms mean any
NMS stock.
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\10\ The proposed replacement of ``Rule'' with ``Section'' would
correct a citation error in the current rule.
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Rule 7.39E
The Exchange proposes a new Rule 7.39E titled ``Tokenized
Securities.'' \11\ As proposed, Rule 7.39E would provide that a
security may be traded on the Exchange in either traditional form (a
digital representation of ownership and rights, but without utilizing a
distributed ledger technology (defined as ``blockchain'' technology)
or, for the duration and under the terms of the DTC Pilot Program, in
tokenized form (a digital representation of ownership and rights which
utilizes blockchain technology). Proposed Rule 7.39E would further
provide that DTC Eligible Participants may trade DTC Eligible
Securities in tokenized form on the Exchange during the duration of,
and pursuant to the terms of, the DTC Pilot Program.
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\11\ Rule 7.39E, currently titled ``Reserved,'' would have its
title changed to ``Tokenized Securities.''
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In addition, proposed Rule 7.39E would provide that the Exchange
would publish Trader Updates periodically to identify a current list of
those DTC Eligible Securities that may trade in tokenized form on the
Exchange. The Exchange expects that such Trader Updates would be
largely for DTC Eligible Participants.
Under proposed Rule 7.39E, a share of a tokenized DTC Eligible
Security will be tradable on the Exchange together with, and with the
same execution priority as, its traditional counterpart, but only if
the tokenized security is fungible with, shares the same CUSIP number
and trading symbol, and affords its shareholders the same rights and
privileges as does a share of an equivalent class of the traditional
security. Except for internal rule cross-references to Exchange rules
and minor grammatical differences, the proposed language is
substantially the same as Nasdaq Equity 1, Section 1.
[[Page 28061]]
Rule 7.36E
The Exchange proposes to amend Rule 7.36E, which governs order
ranking and display, to add a new Commentary .01 providing that the
mere fact that an order contains tokenized securities or indicates a
preference of a DTC Eligible Participant to clear and settle DTC
Eligible Securities in tokenized form will not affect the priority in
which the Exchange executes that order. Except for internal cross-
references to Exchange rules and minor grammatical differences, the
language of proposed Rule 7.36E.01 is substantially the same as Equity
4, Nasdaq Rule 4757.
Rule 7.37E
The Exchange proposes to amend Rule 7.37E, which governs routing,
to add a new subsection (b)(10) that would provide that when the
Exchange routes orders in DTC Eligible Securities that DTC Eligible
Participants have designated for clearing and settlement in tokenized
form in accordance with proposed Rule 7.41E, Commentary 01 [sic], the
Exchange will communicate this tokenization instruction to DTC upon
receiving an execution for an order that was routed to another trading
venue. Except for certain non-substantive differences,\12\ the proposed
language in Rule 7.37E(b)(10) is substantially the same as Equity 4,
Nasdaq Rule 4758.
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\12\ The non-substantive differences include internal cross-
references to Exchange rules, minor grammatical differences, and the
addition of defined terms, including the definition of ``DTC
Eligible Participant,'' which the Exchange proposes to define in
Rule 7.37E(b)(10) and Nasdaq has defined in Equity 4, Nasdaq Rule
4756.
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Rule 7.41E
The Exchange proposes to add a new Commentary .20 to Rule 7.41E,
which governs clearance and settlement, describing how a DTC Eligible
Participant can communicate its desire to clear and settle a DTC
Eligible Security in tokenized form.
Proposed Commentary .20 to Rule 7.41E would provide that a DTC
Eligible Participant (as defined in Rule 7.37E(b)(10)) that wishes for
its order in a DTC Eligible Security to clear and settle in tokenized
form as part of the DTC Pilot Program must notate its preference upon
entry of the order in the Exchange systems by selecting a tokenization
flag that the Exchange designates for this purpose, in accordance with
the Exchange's procedures. When a DTC Eligible Participant enters an
order for a DTC Eligible Security with the tokenization flag selected,
the Exchange will communicate the DTC Eligible Participant's
tokenization preference to DTC on a post-trade basis. The flag will
indicate the DTC Eligible Participant's preference as to what form the
security will take (i.e., token or traditional) and may also include
other information or instructions that DTC may require the DTC Eligible
Participant to enter, in accordance with DTC's rules, policies, and
procedures, and the terms of the No-Action Letter, to effectuate the
flag, such as the DTC Eligible Participant's selection of a blockchain
and a digital wallet address for a tokenized DTC Eligible Security (the
Exchange will issue a Trader Update prior to requiring a DTC Eligible
Participant to enter any such information or instructions to the flag,
other than its tokenization preference). DTC will then carry out the
DTC Eligible Participant's tokenization preference, as set forth in the
flag, as well as any instructions attendant thereto to the extent that
the flag or instruction is executable in accordance with DTC's rules,
policies, and procedures, and the terms of the No-Action Letter.
Proposed Commentary .20 to Rule 7.41E further provides that
Exchange systems will not determine whether an ETP Holder is a DTC
Eligible Participant or whether a security is a DTC Eligible Security
at the time of order entry and selection of the tokenization flag. The
Exchange also will not determine whether DTC is able to execute a
tokenization order for other reasons, including because the DTC
Eligible Participant wishes to mint the token to a blockchain that is
not compatible with the DTC Pilot Program or to a digital wallet that
is not registered with DTC.\13\ Thus, if at the time of order entry, an
ETP Holder is not a DTC Eligible Participant, the security selected for
tokenization is not a DTC Eligible Security, or there are other reasons
why DTC cannot execute a tokenization preference or instruction, the
order will be settled in traditional (non-tokenized) form, in
accordance with DTC's rules, policies, and procedures. It is the sole
responsibility of ETP Holders to determine for themselves whether they
are DTC Eligible Participants, whether the securities subject to an
order are DTC Eligible Securities, whether the blockchains and wallets
to which they wish to mint tokens are compatible with the DTC Pilot
Program, and whether the tokenization instruction is otherwise
consistent with the terms of that program and the No-Action Letter.\14\
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\13\ According to the No-Action Letter, any DTC participant
would be permitted--at the DTC participant's election--to
participate in the DTC pilot tokenization services, with certain
exceptions for participants for which DTC has U.S. tax withholding
or reporting obligations, or a Treasury International Capital
reporting obligation. See No-Action Letter, supra note 4.
Additionally, the No-Action Letter states that DTC will not
execute a tokenization instruction if a DTC Eligible Participant
cannot pass DTC's risk management and compliance controls. See id.
If a transaction would result in a participant breaching its Net
Debit Cap (as defined in the No-Action Letter), then the control
would not allow that transaction to process until it could do so
without breaching the cap. See id.
\14\ If the Exchange develops the functionality that would allow
it to check for eligibility at order entry, it will submit a rule
proposal to effectuate that functionality at the appropriate time.
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Again, except for certain non-substantive differences,\15\ proposed
Rule 7.41E.20 is substantially the same as Equity 4, Nasdaq Rule 4756.
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\15\ The non-substantive differences include references to ETP
Holders, internal cross-references to Exchange rules, minor
grammatical differences, and the movement of the definition of DTC
Eligible Participant to proposed Rule 7.37E(b)(10).
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General Considerations
Other than as described above, from an Exchange system and matching
engine perspective, the Exchange's trading procedures and behavior will
be the same regardless of whether a DTC Eligible Participant opts to
trade tokenized or traditional shares of a DTC Eligible Security.\16\
Among other things, the following aspects of the Exchange's current
trading system and procedures will not change when trading tokenized
securities:
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\16\ The Exchange's pricing structure and rates will not vary
depending upon whether a transaction involves a share of a tokenized
security. See also supra note 6.
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<bullet> All Exchange order types and modifiers will be available
for use with tokenized securities;
<bullet> All Exchange routing strategies will be available for
orders in tokenized securities;
<bullet> Orders in tokenized securities may participate in all of
the Exchange's trading sessions, including Core Open Auctions and
Closing Auctions (as defined in Rule 7.35E), subject to generally
applicable eligibility criteria;
<bullet> ETP Holders may utilize their existing connectivity to
enter orders in tokenized securities;
<bullet> The Exchange's fee schedule will not vary based upon
whether shares that ETP Holders execute are tokenized or traditional in
nature;
<bullet> Market data feeds will not differentiate between tokenized
and traditional securities;
<bullet> The Exchange will comply with any Commission requirements
to report tokenization data to the Consolidated Audit Trail;
<bullet> Market surveillance of tokenized and traditional
securities will rely upon the same underlying data, which will
[[Page 28062]]
continue to be accessible by the Exchange and the Financial Industry
Regulatory Authority (``FINRA'');
<bullet> Trades in tokenized securities handled by DTC will
continue to settle on a T+1 basis;
<bullet> The Exchange's clearly erroneous and risk management
measures will cover tokenized securities; and
<bullet> Trading of tokenized securities under this proposal is not
expected to alter the existing proxy distribution process.\17\
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\17\ According to DTC, a DTC Eligible Participant may need to
issue a de-tokenization instruction or DTC may need to force
conversion of the Tokenized Entitlement into a Book-Entry
Entitlement in order to receive a distribution or replacement
security or to issue instructions in relation to the corporate
action. In such situations, DTC would, to the extent feasible,
provide the relevant participants with advance notice of the need to
provide such instruction or DTC's need to take such action. See note
4, supra. ``Tokenized Entitlement'' and ``Book-Entry Entitlement''
are used as defined in the No-Action Letter. See id. at 2-3.
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This proposal to offer trading in tokenized securities will become
effective once the requisite infrastructure and post-trade settlement
services have been established by DTC. The Exchange understands that
DTC is working to develop the necessary infrastructure, services, and
procedures to facilitate such tokenization and the related post-trade
settlement infrastructure and services.\18\ On December 11, 2025, the
No-Action Letter was issued, which enables DTC to begin providing
services that support the Exchange's proposal as soon as this
development is complete.
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\18\ See id.
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Securities that are DTC Eligible Securities--meaning that they are
eligible for tokenization and de-tokenization as part of the DTC
tokenization pilot program--will be limited to the following, for
purposes of this proposal: (i) securities in the Russell 1000 Index at
the time the service launches as well as any additions to the index
thereafter and notwithstanding the subsequent removal of any securities
from the index; and (ii) exchange traded funds that track major
indices. These categories of DTC Eligible Securities will be the only
tokenized equities that are available to trade on the Exchange under
this proposal.
The Exchange will alert its ETP Holders in a Trader Update at least
30 calendar days before the Exchange begins trading DTC Eligible
Securities in tokenized form on its market.
DTC states that it will provide tokenization services on a pilot
basis, as described above, for a period of three years after launch,
after which time DTC will sunset the service.\19\ Thus, the Exchange
will revisit this rule proposal when it knows what, if anything, will
replace the service after it sunsets.
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\19\ See DTCC, No-Action Letter and DTC Tokenization Service
FAQ, at 1, available at <a href="https://www.dtcc.com/-/media/Files/Downloads/digital-assets/dtc-tokenization-service-faq.pdf">https://www.dtcc.com/-/media/Files/Downloads/digital-assets/dtc-tokenization-service-faq.pdf</a>.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\20\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\21\ in that it is designed to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, to foster cooperation and
coordination with persons engaged in facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system and, in general, to
protect investors and the public interest by strengthening the
Exchange's ability to oversee and police its marketplace.
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\20\ 15 U.S.C. 78f(b).
\21\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed rule change is consistent
with the Act because it would enable the trading of tokenized
securities within the existing framework of the national market system,
without requiring wholesale exemptions from investor protections. The
proposed amendments are narrowly tailored to accommodate the DTC Pilot
Program while preserving the integrity, efficiency, and investor
protections of the Exchange's existing trading rules. The Exchange
believes that all existing Commission and Exchange rules that currently
apply to non-tokenized securities will continue to apply, without
modification, to the trading of tokenized securities, except as
expressly provided herein. The Exchange also believes that the proposed
rule change is not designed to permit unfair discrimination between
customers, brokers and dealers, consistent with Section 6(b)(5) of the
Act.\22\ The proposal is not designed to permit unfair discrimination
between brokers and dealers because the proposed changes will apply
equally to all similarly situated ETP Holders seeking to trade
tokenized securities on the Exchange.
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\22\ 15 U.S.C. 78f(b)(5).
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The Exchange further believes the proposed rule change furthers the
objectives of Section 6(b)(5) of the Act in that it is designed to
prevent fraudulent and manipulative acts and practices. The proposed
rule change ensures that tokenized securities may only be traded on the
Exchange if they are fungible with, share the same CUSIP number and
trading symbol as, and afford their holders the same rights and
privileges as, traditional securities of an equivalent class. By
tethering tokenized securities to their traditional counterparts in
this manner, the proposal eliminates the potential for price
dislocation, manipulation, and investor confusion that could arise from
the trading of tokenized instruments outside the national market
system. In addition, all Exchange rules, including rules governing
clearly erroneous transactions, short sales, risk management, and
market surveillance will apply equally to tokenized and traditional
securities. Market surveillance of tokenized and traditional securities
will rely upon the same underlying data, which will continue to be
accessible by the Exchange and FINRA. Trades in tokenized securities
handled by DTC will continue to settle on a T+1 basis. The Exchange's
clearly erroneous and risk management measures will cover tokenized
securities.
The Exchange also believes the proposed rule change furthers the
objectives of Section 6(b)(5) of the Act in that it is designed to
promote just and equitable principles of trade and to remove
impediments to and perfect the mechanism of a free and open market and
a national market system. The Commission has previously approved rules
of another national securities exchange--Nasdaq--enabling the trading
of tokenized securities. The Exchange's proposal to adopt comparable
rules to allow DTC Eligible Participants to trade DTC Eligible
Securities in tokenized form on the Exchange, subject to the same
conditions and restrictions as approved for Nasdaq, promotes a fair,
consistent, and interoperable national market system framework for
tokenized securities trading. ETP Holders will be able to access
tokenized securities trading across multiple exchanges on equivalent
terms, promoting competition and efficient price discovery. The
Exchange will comply with any Commission requirements to report
tokenization data to the Consolidated Audit Trail, further supporting
the integrity and transparency of the national market system.
In addition, the Exchange believes that the proposed rule change is
not designed to permit unfair discrimination between customers, brokers
and dealers, consistent with
[[Page 28063]]
Section 6(b)(5) of the Act \23\ because the proposed changes will apply
equally to all similarly situated ETP Holders seeking to trade
tokenized securities on the Exchange. All DTC Eligible Participants
will be subject to the same conditions for tokenized trading, including
the requirement to select a tokenization flag at order entry, and all
DTC Eligible Securities will be subject to the same fungibility, CUSIP,
and rights requirements. The Exchange will not impose conditions on
tokenized trading that favor any particular ETP Holders or class of
securities over any other.
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\23\ 15 U.S.C. 78f(b)(5).
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Finally, the Exchange believes the proposed rule change is designed
to foster cooperation and coordination with persons engaged in
facilitating transactions in securities, consistent with Section
6(b)(5) of the Act. The Exchange's proposal is expressly designed to
work in coordination with the DTC Pilot Program, pursuant to the No-
Action Letter. The proposed rules establish a clear and workable
framework for the Exchange, DTC, and Exchange ETP Holders to cooperate
in enabling the clearing and settlement of tokenized securities through
the existing post-trade infrastructure. This cooperative approach,
leveraging DTC's established role as the nation's central securities
depository, ensures that tokenized securities trading occurs within a
safe, regulated, and transparent framework that protects investors and
promotes the public interest.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed rule change
would enable the trading of tokenized securities on the Exchange in a
manner that is consistent with the approved rules of another national
securities exchange for the same purpose. Facilitating access to
tokenized securities across multiple exchanges promotes competition and
is in the interest of investors and the investing public. The proposed
rule change does not impose any barriers to entry for ETP Holders and
does not create any competitive disadvantages between and among market
participants. The Exchange believes the proposed rule changes, taken
together, will strengthen the Exchange's ability to carry out its role
and responsibilities as a self-regulatory organization in connection
with the trading of tokenized securities. As such, the Exchange does
not believe that the proposed rule change will impose any burden on
competition not necessary or appropriate in furtherance of the purposes
of the Act.
The Exchange believes that its proposal will be particularly
attractive because it will provide for the trading of tokenized DTC
Eligible Securities in a manner that is familiar to market participants
and investors and which is consistent with existing laws and rules.
Under this proposal, the extent to which ETP Holders will need to
modify their back-end systems and practices to accommodate tokenized
securities trading should be minimal; those systems may simply need to
account for the availability of the new flag and be set up to provide
any information that the flag requires to the Exchange. The Exchange
notes that ETP Holders on the Exchange will remain free to trade, clear
and settle securities in traditional form, including both DTC Eligible
Securities and other securities.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A) of the Act \24\ and Rule 19b-4(f)(6) \25\ thereunder.
Because the foregoing proposed rule change does not: (i) significantly
affect the protection of investors or the public interest; (ii) impose
any significant burden on competition; and (iii) become operative for
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, it has become effective pursuant to
Section 19(b)(3)(A) of the Act \26\ and Rule 19b-4(f)(6) \27\
thereunder.
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\24\ 15 U.S.C. 78s(b)(3)(A).
\25\ 17 CFR 240.19b-4(f)(6).
\26\ 15 U.S.C. 78s(b)(3)(A).
\27\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#bccec9d0d991dfd3d1d1d9d2c8cffccfd9df92dbd3ca"><span class="__cf_email__" data-cfemail="3143445d541c525e5c5c545f4542714254521f565e47">[email protected]</span></a>. Please include
file number SR-NYSEAMER-2026-36 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-NYSEAMER-2026-36. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). Copies of the filing will be available for inspection and
copying at the principal office of the Exchange. Do not include
personal identifiable information in submissions; you should submit
only information that you wish to make available publicly. We may
redact in part or withhold entirely from publication submitted material
that is obscene or subject to copyright protection. All submissions
should refer to file number SR-NYSEAMER-2026-36 and should be submitted
on or before June 5, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\28\
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\28\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2026-09739 Filed 5-14-26; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on May 15, 2026.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.