The SEC's Investor Advisory Committee (IAC) Market Structure Subcommittee has proposed that regulatory bodies should not grant a "broad innovation exemption" for stock tokenization. Instead, they suggest implementing limited exemptions or reforming rules on a case-by-case basis to adjust regulations while maintaining core investor protection principles. These principles include clear disclosure of investor rights, continued oversight of intermediaries by the SEC and FINRA, and ensuring trades adhere to best execution standards. The proposed regulatory reforms should be developed through a public comment process.