On October 19, 2026, SIFMA asked the SEC to require affirmative issuer consent before third-party tokenized stocks trade on Tokenized Securities Venues, and to clarify how holders exit if an issuer later objects. Its comment letter on the Innovation Exemption proposes replacing the current 30-day objection window with a 90-day period tied to confirmed receipt.
The letter arrives after the exemption has taken effect. SIFMA says several venues have published notices and may begin operating within 30 days, while issuers have begun receiving notices about their stocks. The association would support more time before trading starts if the SEC concludes it needs that time to address the questions or consult the industry. Its requests concern an operative exemption; the letter announces no SEC decision.
SIFMA asks the Commission to define what happens to outstanding tokens and liquidity-pool positions when an issuer withdraws permission to trade. It wants a wind-down process that specifies whether holders can still transfer, redeem or otherwise exit their positions. The request covers the treatment of positions already open when an issuer exercises the controls SIFMA proposes.
Silence, receipt and the objection clock
SIFMA describes a notice process that directs messages to the physical or email address of an issuer’s principal executive offices listed in its Exchange Act reports. Those can be general corporate mailboxes receiving unrelated correspondence. The association warns that a notice may fail to reach staff able to evaluate it before the objection period expires.
SIFMA wants to replace that process with an opt-in. A third-party tokenized version of an issuer’s stock would trade only after affirmative consent. The letter objects to requiring companies to locate and authenticate notices from potentially numerous venues within a short period, with silence treated as consent.
The letter also addresses failed delivery. SIFMA asks whether an email caught by a spam filter, rejected by a server or returned as undeliverable counts as receipt. It asks who must identify and correct failed delivery, and whether sending the notice again restarts the clock. The letter leaves those questions about receipt and the objection period for the SEC to answer.
SIFMA proposes a public portal that would list each venue’s notice of operations, earliest permitted start date, actual launch date and intended tokenized stocks. The portal would identify amendments, and each issuer notice would carry its response deadline. Companies could designate an official contact and record a venue-specific consent, objection or universal opt-out. Users would search by ticker or company name.
Under that proposal, the objection period would run from the later of portal posting and confirmed receipt by the designated contact, regardless of earlier delivery attempts. SIFMA also offers a fallback if the SEC rejects its broader recommendations: address notices to the corporate secretary and extend the period from confirmed receipt. Both proposals seek a longer review window. The portal would also provide a shared record of venue and issuer decisions.
SIFMA asks what information a venue must provide so an issuer can evaluate the notice. Its questions cover the third party tokenizing the shares, the token’s structure, its blockchain, custody arrangements and transfer restrictions. Redemption into the underlying security is explicitly among the rights it wants explained before the issuer decides.
Withdrawal of consent and shareholder rights
SIFMA wants an issuer to retain control after the initial window closes. Its proposed universal opt-out would prohibit every venue from trading a third-party tokenized version of that company’s stock. Separately, the issuer could object to a particular venue or withdraw earlier consent at any time, including after learning that the venue was violating the exemption’s conditions or other law.
The letter asks how issuers will identify beneficial owners for voting, dividends, tender offers, proxy solicitation and other communications. SIFMA also wants the SEC to clarify who must supply accurate ownership information to issuers and transfer agents. It asks how quickly a venue must correct inaccurate statements about securities, shareholder rights or corporate actions.
SIFMA asks whether a token bought on a venue must be sold within that venue ecosystem, or whether holders may send it peer-to-peer, onto other public permissionless chains, or to offshore and unregulated venues. If transfers are prohibited, it wants the SEC to explain how those restrictions would be enforced. The letter leaves unresolved which transfers holders would be permitted to make.
Disclosures and limits across venues
SIFMA also challenges the exemption’s reliance on disclosure. Its letter identifies processes that venues describe only if they exist: customer verification and anti-money-laundering procedures, complaint and execution-error handling, personal-information protection, systems safeguards, trading oversight and protections against maximal extractable value attacks. The association asks whether the SEC regards those investor protections as optional.
SIFMA notes that venues must consent to staff access to their books and records at any time. It asks how often examinations will occur, how they will be staffed and scoped, and whether that access adequately substitutes for the examination regime applied to registered exchanges and broker-dealers. It also asks how the SEC will verify disclosures and enforce the conditions.
As SIFMA describes the order, volume and symbol limits apply per venue, with aggregation across affiliated venues. Unaffiliated venues can consequently add to total tokenized trading in the same stock. The association asks how the SEC will monitor cumulative activity, including liquidity-provider activity across venues, and respond if it reaches levels the individual limits were intended to prevent.
The letter separates requests the SEC could answer through guidance or frequently asked questions from proposals requiring amendments. Affirmative consent, a longer objection window and a universal issuer opt-out fall in the latter category. SIFMA’s proposed exit rules remain a request: the letter asks the SEC to specify what holders can do with tokens and pool positions when an issuer withdraws permission after trading has begun.
