SEC Chairman Paul Atkins States That the SEC is Providing Clear Rules for the Market to Develop Innovative Technologies in the U.S.
Paul Atkins stated that during his tenure, the SEC is providing clear rules for the market to develop innovative technologies in the U.S., calling it a generational opportunity to advance U.S. digital financial leadership.
This statement corresponds to the "Innovation Exemption" released on September 17: Following the Senate's failure to advance the "Clarity Act" by a vote of 49 to 50, the Commission granted a conditional exemption for five years, until September 17, 2031, under Section 36 of the Securities Exchange Act of 1934. Tokenized securities trading venues may not be classified as exchanges if they meet certain conditions, and specific liquidity providers can provide liquidity for tokenized national market system stocks through a licensed automated market-making pool without being classified as dealers. Venues must be U.S.-based, comply with sanctions from the Office of Foreign Assets Control, and restrict access; issuers can oppose in writing within 30 days any third party's tokenization of their stocks. Synthetic products without corresponding holdings are excluded.
The "crypto project" has been underway for a year, aiming to bring U.S. capital markets on-chain. Concurrently, there are proposals for crypto asset regulations discussing when investment contracts terminate, issuance exemptions, and safe harbors. Atkins has repeatedly stated that legislation remains a more durable future protection, while administrative exemptions are merely a bridge to formal rules. The CFTC has also indicated it will follow up with its own rules.
Regulation has shifted from congressional legislative gaps to administrative exemptions. Buyers are venues and market makers looking to conduct secondary trading of tokenized stocks in the U.S., while sellers are the SEC, which is exchanging a five-year window for data and practice. The event is driven by the failure of the bill and the crypto agenda. Beneficiaries are U.S. entities that comply with licensing and sanction terms and can trade on-chain immediately; those under pressure are tokenized products that can be vetoed by issuers and agreements that remain outside the definitions of "exchanges" and "dealers." The clarity is not a permanent law but a revocable five-year experiment.
Source: Public Information
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Atkins rewrote the market structure bill that Congress did not pass into an exemption that the SEC can issue itself. The path is a year of warming up the crypto project, issuing the order two days after the bill's failure, placing the secondary market for tokenized stocks into a licensed automated market-making pool. The definitions of exchanges and dealers have been temporarily separated, allowing for compliance with sanctions, U.S. entities, and issuer veto rights. Legislation is still framed as the ultimate insurance, while the administrative order is written as an emergency bridge to prevent innovation from going offshore.
Capital is migrating back from offshore platforms to tokenized venues that can be reported in the U.S. The five-year window allows venues to first generate volume, then provide samples for formal rules. The motivation is to retain on-chain liquidity for listed stocks through domestic trading, avoiding a situation where demand is pushed offshore again. The resource is the definition of the exemption itself: whoever obtains venue or coverage company identity can provide on-chain liquidity outside traditional market-making licenses. The issuer's 30-day right of opposition keeps control of listed companies within existing governance.
In comparison to the exemption experiments post-1933, the incorporation of Reg ATS for alternative trading systems, and recent enforcement cycles against crypto exchanges, the U.S. is in a transitional period of legislative stagnation and administrative sprint: the structural law did not pass, and the securities law definitions are being patched. Control has shifted from congressional texts to conditional orders from the Commission, which the next chair can still amend or revoke.
The essence is regulatory change. On-chain stock trading is permitted but confined within the boxes of licensing, sanctions, and issuer vetoes. The mechanism is: if Congress does not legislate, administrative agencies will use Section 36 to create a temporary market; once a temporary market is formed and volume is generated, the cost of withdrawal increases, which is precisely the design of the exemption as a "bridge." The tangible outcome of the leadership narrative is a pass that expires in 2031, not a new law.
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If the bill does not pass, the exemption order becomes the market structure.
The five-year window first exchanges volume, and volume then drives long-term rules.
The issuer's veto right can determine who can be listed more than on-chain speed.