NYSE Proposes Rule Overhaul To Enable Tokenized Stocks And ETFs Under DTC Pilot

New York Stock Exchange (NYSE) has submitted a proposed rule change to the US Securities and Exchange Commission (SEC) seeking permission for tokenized versions of eligible stocks and exchange-traded funds to trade on the exchange under a three-year Depository Trust Company pilot program. 

Under the filing, a tokenized security would need to match its traditional counterpart in key respects, including the CUSIP, ticker symbol, rights, privileges, and fungibility, while trading would occur on the same order book and follow the same execution priority rules as standard securities. Clearing and settlement would continue through DTC on a T+1 basis.

The proposal would create Rule 7.50 for tokenized securities and amend several existing provisions covering definitions, order handling, routing, execution, clearing, and settlement. The exchange said its current rulebook does not provide a mechanism for tokenized securities to trade in this format. 

The filing is linked to a DTC pilot program referenced in a December 11, 2025 SEC staff no-action letter and would apply only to securities and member firms that qualify for that program. In the filing, the exchange described the eligible firms as DTC Eligible Participants and the qualifying assets as DTC Eligible Securities, which may include approved equities and exchange-traded products.

NYSE Proposal To Position Tokenized Securities Within Existing Market Structure 

According to the exchange, tokenized securities would remain part of the national market system rather than being moved to a separate blockchain venue. Orders would still be entered through the NYSE, with token-based clearing and settlement used only when an eligible participant selects that option at order entry. 

The exchange also said the model is intended to allow the tokenized and conventional versions of a security to coexist on the same book, rather than creating a parallel market.

The filing argues that existing US securities law can accommodate tokenized instruments without requiring a separate market structure. It also places the proposal in the context of earlier market transitions, including decimalization, electronic trading, and exchange-traded funds. 

At the same time, the document notes that tokenization would introduce new operational, custody, compliance, settlement, tax-reporting, and pricing considerations, particularly if the model were later applied beyond widely traded listed securities to thinner or harder-to-value assets.

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