SIFMA Opposes SEC Shortcut on Crypto Tokenized Equities

• SIFMA warns crypto firms can sidestep investor safeguards.
• Exemptive relief seen as bypassing Regulation NMS and FINRA oversight.
• Full rulemaking process advocated to ensure transparency and stability.

In a recent letter to the SEC’s Crypto Task Force, the Securities Industry and Financial Markets Association (SIFMA) strongly opposed granting no-action or exemptive relief to crypto platforms seeking to trade tokenized equities. SIFMA’s concern centers on investor protection and market stability. They argue that allowing tokenized equities to be traded outside traditional frameworks could sidestep key safeguards like FINRA oversight and broker-dealer regulations.

Risks of Exemptive Relief

According to SIFMA, giving immediate relief to crypto firms undermines the structured environment provided by Regulation NMS, Know-Your-Customer (KYC), Anti-Money Laundering (AML), and fair market practices. They believe exemptive relief could result in fragmented markets, reduced price transparency, and increased systemic risks—issues that current regulatory systems were built to prevent.

SIFMA’s Call for Public Rulemaking

Rather than making regulatory exceptions, SIFMA is calling for a full notice-and-comment rulemaking process. This would allow regulators, industry players, and the public to weigh in on how to properly integrate tokenized equities into the broader U.S. financial system. Such a transparent approach, they argue, is necessary to maintain investor trust and ensure long-term market integrity.

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