The US Securities and Exchange Commission has approved Nasdaq’s rule change to support tokenized stock trading and settlement. As a result, eligible participants can settle selected equity trades in tokenized form through a pilot run by the Depository Trust Company.
The approval covers certain Russell 1,000 stocks and index-tracking exchange-traded funds. It also keeps existing securities laws, shareholder rights, and exchange execution standards in place.
The SEC approved Nasdaq’s proposal under File No. SR-NASDAQ-2025-072 on March 19, 2026. The order allows Nasdaq members in the DTC pilot to trade selected equities and exchange-traded products in tokenized form. The SEC said the proposal met requirements under the Securities Exchange Act of 1934. Therefore, Nasdaq can begin the pilot under the conditions listed in the filing.
The approved list includes securities in the Russell 1,000 Index and later additions. It also includes ETFs that track the S&P 500 and Nasdaq-100. Nasdaq said it will publish Equity Trader Alerts with the list of eligible tokenized securities. That means market participants will receive a defined list for the pilot program.
The filing also sets conditions for tokenized shares. They must remain fungible with traditional shares and carry the same CUSIP and trading symbol. In addition, they must provide the same rights and privileges as standard equity holdings. Those tokenized shares will trade on the same order book and under the same execution priority rules.
Nasdaq’s rule change focuses on settlement after trade execution, not a separate market for blockchain stock. Eligible participants must choose a specific order-entry flag when they want tokenized settlement. Nasdaq then sends that instruction to DTC after the trade executes. Accordingly, the tokenized process remains linked to existing trading and centralized clearing systems.
The structure of the pilot follows DTC’s no-action relief from December 11, 2025. SEC staff allowed DTC to develop a preliminary tokenization service for certain eligible securities. The no-action materials covered tokenized entitlements for Russell 1000 securities, selected U.S. Treasury securities, and major index ETFs. Commissioner Hester Peirce said the program would support tokenization of security entitlements that DTC participants hold through DTC.
The filing also includes a fallback mechanism. If DTC cannot complete tokenized settlement, it will settle the executed order in non-tokenized form. That can happen if a participant uses an unsupported blockchain or an unregistered wallet. As a result, the pilot allows tokenized settlement without removing the traditional settlement route.
The approval comes as SEC Chairman Paul Atkins advances crypto-related rulemaking. On February 18, 2026, Atkins said the agency planned to consider an “innovation exemption” for tokenized securities and similar products. He said the SEC wanted firms to test new products while the agency worked on clearer rules. However, the Nasdaq approval does not create a separate legal category for tokenized equities.
Instead, the SEC order states that tokenized shares remain subject to current securities requirements. The filing says investors in tokenized shares must receive the same rights and privileges as holders of traditional shares. It also states that the approval applies only to Nasdaq’s approach through the DTC pilot. If Nasdaq adopts a different tokenization model later, it must file another proposed rule change.