The US SEC’s Trading and Markets Division clarifies how broker-dealers can custody tokenized stocks and bonds under existing customer protection rules. Tokenized securities will be integrated into traditional safeguards, not treated as a new asset class. This ensures operational, security, and governance conditions are met for crypto securities.

Rule 15c3-3 requires broker-dealers to maintain control of fully paid customer securities, even with blockchain-recorded crypto asset securities. Exclusive control over private keys is crucial, preventing customers or third parties from unauthorized transfers. The guidance emphasizes customer protection over crypto’s permissionless nature.

SEC Commissioner Hester Peirce raises concerns about trading crypto asset securities on national securities exchanges and alternative trading systems. Pressure mounts to adapt market-structure rules for blockchain-based assets. Questions arise over whether existing frameworks impose costs that outweigh benefits on crypto trading platforms.

Nasdaq plans to fast-track tokenized stocks, while Securitize focuses on compliant, onchain trading for tokenized securities. Coinbase launches a stock trading feature, aiming to expand its offerings. The move towards tokenized equities signals a shift towards blockchain integration in traditional market activities.

Read more at Cointelegraph: SEC Staff Clarifies Custody Rules for Tokenized Stocks and Bonds