WASHINGTON, March 12, 2026 — Hester M. Peirce said March 12 that staff at the U.S. Securities and Exchange Commission are working on an innovation exemption intended to facilitate limited trading of certain tokenized securities.
Speaking at a meeting of the SEC’s Investor Advisory Committee in Washington, Peirce said the initiative under consideration by Commission staff would be narrower than a broader exemption referenced in a draft recommendation discussed by the committee.
Staff exploring innovation exemption
Peirce said SEC staff are evaluating an exemption framework designed to allow firms to experiment with blockchain-based tokenization while maintaining investor protections.
“Commission staff is working on an innovation exemption to facilitate limited trading of certain tokenized securities—much narrower than the ‘blanket’ exemption mentioned in the draft recommendation,” Peirce said in prepared remarks.
The commissioner said the potential exemption would support experimentation with tokenization technologies while allowing regulators to assess risks and market implications.
Questions raised on tokenized securities framework
During the meeting, Peirce asked the committee to consider several questions related to how an innovation exemption might operate.
Those questions included whether existing SEC issuer disclosure requirements are sufficient for investors in tokenized securities and whether broker-dealers or clearing agencies that tokenize security entitlements should face additional disclosure obligations.
Peirce also asked whether atomic settlement of tokenized equity securities would require regulatory relief from existing settlement rules, including the Commission’s T+1 settlement framework.
Broader discussion on tokenization
The remarks came as the Investor Advisory Committee continued discussions on securities tokenization and potential regulatory approaches to digital representations of traditional securities.
Peirce said public discussion among committee members can help inform the Commission’s consideration of tokenization and potential regulatory responses.
The commissioner also asked whether an innovation exemption should permit multiple tokenization models and what conditions might be necessary to preserve investor protections while minimizing regulatory arbitrage.
