US SEC Releases Document 34-105260 Disclosing NYSE's Application for Tokenized Securities Trading Rules
The U.S. Securities and Exchange Commission has released document 34-105260, disclosing the New York Stock Exchange's application for a rule change to introduce Rule 7.50, which allows eligible securities to be traded and settled in a blockchain-based tokenized form in addition to traditional forms. This arrangement will operate under the DTC pilot program.
According to the proposal, tokenized securities will share the same trading codes and rights structure as traditional securities, being fully interchangeable and enjoying the same execution priority in the matching system. Trading participants can choose on-chain clearing and settlement through a tokenization flag, processed by custodians, while the NYSE will simultaneously modify order sorting, routing, and clearing rules for seamless integration.
Source: Public Information
ABAB AI Insight
The NYSE's rule application marks the formal integration of blockchain technology into the core trading and settlement infrastructure of traditional exchanges. Tokenized securities maintain full interchangeability and the same legal rights as traditional forms, only changing the method of recording and transfer, which avoids creating a new asset class while directly testing the compatibility of existing market structures with distributed ledgers. The limited scope launch under the DTC pilot framework (e.g., Russell 1000 constituents and major index ETFs) reflects a cautious balance by regulators between innovation and investor protection.
This move is part of the long-term evolution of global financial infrastructure. Traditional clearing relies on centralized entities like DTC and NSCC, while on-chain settlement has the potential to reduce friction costs in T+1 or shorter cycles, enhance cross-border and 24/7 trading efficiency, and strengthen institutional interest in bringing real-world assets on-chain. In terms of capital allocation, pricing power may shift from pure intermediaries to participants who possess both custody and blockchain capabilities, accelerating the reallocation of wealth from traditional custody chains to hybrid infrastructures.
Historically, this continues the adjustment path of institutional constraints in the cycle of technological substitution. In the past, electronic trading reshaped order routing and liquidity; today, tokenization tests a similar leap but faces challenges of interoperability, custody risk, and regulatory alignment. In the long run, if approved and expanded, it will drive the securities market from purely centralized databases to hybrid ledgers, testing the adaptability of existing securities laws to new technological formats without changing the essence of rights, while reassessing the structural role of blockchain in capital formation and settlement efficiency against a backdrop of high debt and liquidity demands.