The U.S. Securities and Exchange Commission has approved a temporary, conditional "Innovation Exemption" permitting limited trading of tokenized National Market System (NMS) stocks on designated on-chain venues known as Tokenized Securities Trading Venues (TSVs). The SEC stated that tokenization offers potential to reduce costs across issuance, settlement, and ownership recording while enhancing market transparency and liquidity. Eligible TSVs may facilitate approved trades through automated market makers and liquidity pools but must comply with strict requirements including public disclosure, trade transparency, circuit breaker coordination, recordkeeping, and technical safeguards. Trading activity will be capped by ticker count and volume limits. The SEC indicated this exemption is designed to gather operational data from on-chain markets to inform future long-term regulatory frameworks.