Federal Register #SR-24X-2026-20

SEC Notice: Rule Changes for Tokenized Securities Trading and Commodity Fund Flexibility

This notice details proposed rule changes by 24X National Exchange LLC and NYSE Arca, Inc. regarding trading innovations in securities and commodity funds: - Government Buyer: - Securities and Exchange Commission (SEC), Division of Trading and Markets - OEMs and Vendors Mentioned: - 24X National Exchange LLC - Depository Trust Company (DTC) - NYSE Arca, Inc. - Products/Services Requested: - Trading of tokenized securities on 24X National Exchange during a three-year pilot program operated by DTC - Tokenized securities must be fungible with traditional securities, share the same CUSIP and trading symbol, and provide identical rights and privileges - Applies to eligible securities, including those in the Russell 1000 Index and major index ETFs - Includes order entry flags for tokenization preference, clearing and settlement in token form, and compliance with existing trading rules - Amendments to United States Copper Index Fund trading rules on NYSE Arca - Allows greater flexibility in the use of commodity interests, including copper futures and OTC derivatives, to better meet investment objectives and reduce tracking error - Unique or Notable Requirements: - Compatibility with DTC's tokenization infrastructure - Equal regulatory treatment and rights for tokenized and traditional securities - Pilot program is limited in scope and duration (three years) - No procurement of physical products or IT systems; this is a regulatory and operational change

Description

This notice pertains to a proposed rule change by 24X National Exchange LLC to amend its rules to allow trading of securities in tokenized form during a pilot program operated by the Depository Trust Company (DTC). The rule change enables eligible exchange members to trade tokenized versions of equity securities and exchange traded products that are fungible with traditional securities and have the same CUSIP number and trading symbol. The pilot program is authorized by a SEC Staff No-Action Letter and aims to facilitate trading and settlement of tokenized securities within the existing national market system framework. The pilot program is expected to last three years, after which the Exchange will revisit the proposal.

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