A working model of the SEC’s Innovation Exemption, Release 34-106402, with sample data.
In September 2026 the SEC let what the order calls a Tokenized Securities Venue trade a listed company’s stock after an unaffiliated firm tokenizes it, without the company’s consent. The company receives written notice and has thirty days to object.
Trading of a Tokenized NMS Stock on the TSV may not commence until at least 30 calendar days from the date when the issuer receives the Issuer Notice.
Release 34-106402, Section II.D. Read the provision
Most of what the order then asks of the venue is recordkeeping:
Those records are kept here, on sample data, and six seats read the same ones. Sign in and take any of them.
Vertalo is the transfer agent in this model. The register it keeps is the product.
Sample data throughout. Space Exploration Technologies Corp. is a real listed company: its name, ticker, CIK and exchange are the only facts about it here. Every holder, price, trade and valuation is invented, and so is every firm except Vertalo, whose appointment as transfer agent is the model's.
| Time (UTC) | Event | Seat | Requires | Status |
|---|---|---|---|---|
| Feb 10 14:06 | Halt received from primary listing exchange for SPCX; pools paused; participants notified 14:10 | Venue | II.H | Halted |
| Feb 22 12:31 | Operational event: The venue's permissioning service stopped answering, so no wallet could be added to or removed from an allow-list; remediated Feb 22 14:05 | Venue | II.I, II.L | Reported |
| Feb 24 | oSPCX admitted for trading; 3 of 75 LULD Tier 1 symbols on the venue | Venue | II.F | Admitted |
| Feb 26 | Public Notice revised to version 4: commenced making a stock available; due Mar 3 | Venue | III | Published |
| Mar 1 | Issuer Notice for dSPCX (DirectShares Inc.) received at Space Exploration Technologies Corp.; thirty days run from receipt | Issuer | II.D | Clock running, day 5 of 30 |
| Mar 3 | Public Notice revised to version 5: material change; due Mar 5 | Venue | III | Published |
| Mar 4 00:00 | Nominee position for Wrapped Equities Custody LLC: 1,460,000 SPCX shares on the register, read by Vertalo | Transfer agent | II.E | Recorded |
| Mar 4 00:00 | Token supply 1,400,000 wSPCX reconciled to 1,460,000 shares held at custodian; attestation issued | Tokenizer | II.E, III.i | Covered, 60,000 unminted |
| Mar 5 | Prior-month ADV 31.8M SPCX shares; wSPCX venue volume 0.18% of the 0.25% limit, aggregated across affiliates | Venue | II.F | Under cap |
| Mar 5 18:42 | Transaction feed published: 25 trades today, USD, pool 0x2b71…7e85; public within 5 minutes | Venue | II.G | Live |
Each party in the order has its own view of the same register. Because no party holds a copy, no two views need reconciling later.
Keeps the register. It receives the issuer notices, runs the objection clock and produces the record an examiner reads.
Sees who wrapped its stock and decides whether to object, inside the thirty days each Issuer Notice starts.
Reconciles its token supply to the shares it holds and issues the attestation. Dividends and proxies pass through it.
Computes its caps and publishes the feed. It mirrors halts and revises the public Notice on the order's cadence.
Holds a token carrying the same dividend, vote and liquidation rights as the share behind it.
Reads every II.L record from the ledger, in human-readable and electronic form, and takes one export.
You have the pool, the participants and the front end. The order asks for a record layer underneath them:
In this model Vertalo runs that layer. It is itself a registered transfer agent.
Section II.E has the venue verify one claim about your token: it gives holders the same rights and privileges as the stock behind it. For a third party’s token, the third party must make proxy materials available to holders at no cost to the issuer or the shareholders.
Proprietary Accounts. A Covered Firm must provide liquidity through a TSV, engage in such trading activity solely for its own account, and must not hold or custody customer assets.
Release 34-106402, Section IV.A. Read the provision
Item III.i has the venue describe how it verified the rights: audits, certifications or attestations. In this model the tokenizer’s supply is reconciled against the register Vertalo keeps, and the attestation the venue’s Notice cites comes from that reconciliation.
A stranger’s token of a listed issuer’s stock can now trade on a venue without the issuer’s consent. The issuer has thirty days from written notice to object, and an objection stops the trading. Vertalo gives the transfer agent of record a place to:
The order allows both. Toggle between them to compare the steps.
Six steps across three parties, with one reconciliation that can fail.
Material change. Changes against version 4, unchanged stretches folded:
… paired in an AMM Liquidity Pool provided by the venue. The fee on the wSPCX / RVUSD AMM Liquidity Pool will fall from 30 to 25 basis points. TSV Participants may consider whether the venue as modified remains consistent with their trading objectives.
Section III: 27 of 30 items addressed. 5 versions kept. 1 revision drafted and not yet published.
Revisions due within five business days of a listed event or of finding a material error, twenty calendar days before a material change, and within thirty days of a quarter end for a non-material change. Every version is kept.
The TSV must maintain all versions of its Notice on its website.
Release 34-106402, Section II.C. Read the provision
A first volume miss is forgiven and a second pauses the symbol for three months. The stepped approach applies to volume only, never to the symbol count. The monitor pauses early, before the threshold, and logs that it did.
After the first time a TSV exceeds the volume threshold in a given Tokenized NMS Stock, each time the TSV subsequently exceeds the volume threshold in the applicable Tokenized NMS Stock, the TSV must immediately pause trading in such Tokenized NMS Stock for three months.
Release 34-106402, Section II.F. Read the provision
| Condition | What it needs | Where you see it |
|---|---|---|
| II.D Issuer notice | Dated delivery, 30-day clock, objection register, Notice amendment within 5 business days | Transfer agent and issuer seats |
| II.E Same rights | The venue verifies the same rights and privileges: interest, dividends, votes and share on liquidation; for a third party's token, proxy materials at no cost to the issuer or the shareholders | Tokenizer seat |
| II.F Caps | Daily calculation against prior-month tape volume, aggregated across affiliates, pause ledger | Venue seat |
| II.G Transparency | USD feed within 10 minutes, 30-day retention, pool address and end-of-day size | Venue seat, public feed |
| II.H Halts | Stop when the listing exchange stops; notify participants; keep the cause and resolution | Venue seat |
| II.L Books and records | Enumerated records, three-year retention past sunset, human-readable and electronic on request | Examiner seat |
| III Public Notice | Published 30 days before operating, revised on a set cadence, every version preserved | Notice generator |
Each condition links to the order’s own words on the provisions page, quoted verbatim.
This model runs on sample data. Vertalo’s Model Context Protocol server exposes register operations to agents on Vertalo’s sandbox, including write tools.