Nasdaq SEC-Approved Rule Opens Tokenized Stock Trading

The SEC signed off on a landmark rule change March 18, 2026. Nasdaq can now let eligible market participants trade tokenized versions of securities on its exchange, under a framework tied to the Depository Trust Company's blockchain pilot.

That approval covers a specific list of assets. According to the official SEC filing at Release No. 34-105047, eligible securities include Russell 1000 Index stocks and ETFs tracking major indices like the S&P 500 and Nasdaq-100.

This move has been years in the making. Nasdaq first filed its proposed rule change on September 8, 2025. Multiple amendments followed before the Commission finally gave its blessing.

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Tokenized Shares Trade Alongside Traditional Ones

Here is what actually changes for traders. A DTC Eligible Participant placing an order can flag it for tokenized settlement. That flag signals to DTC the participant's blockchain preference, including wallet address selection.

The tokenized share must be fungible with its traditional counterpart. Same CUSIP. Same trading symbol. Same shareholder rights, including dividends, voting, and liquidation claims.

Both forms trade on the same order book. Execution priority does not change based on whether shares are tokenized or traditional. Market data feeds also will not separate the two.

Trades still settle on a T+1 basis. Nasdaq's clearing error and risk management rules apply equally. FINRA and Nasdaq market surveillance will pull from the same underlying data for both forms.

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What Happens When Tokenization Fails at Entry

Nasdaq's systems will not check eligibility at order entry. That part matters. If a participant is not DTC-eligible, or selects an incompatible blockchain, DTC defaults to traditional settlement automatically.

No order rejection. No system halt. It just processes as normal non-tokenized settlement.

Nasdaq must issue an Equity Trader Alert at least 30 days before tokenized trading goes live. The exchange will also publish updated lists of DTC Eligible Securities periodically.

Several commenters had pushed back on the original filing's lack of technical detail. The Digital Chamber and SIFMA both flagged incomplete post-trade information in October 2025 letters to the Commission. Ondo Finance initially objected, then withdrew the objection in December after DTCC published its no-action letter with sufficient operational detail.

Better Markets took a harder line. The group questioned in its letter whether tokenized Nasdaq trading was necessary at all. The SEC acknowledged the objection but found the proposal's safeguards adequate.

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The Pilot Is Just the Beginning

Nasdaq made something clear in its response to commenters. This DTC Pilot-based approach is one method among several the exchange is evaluating. Other tokenization structures are under active review.

Any alternative to the DTC Pilot will require a separate rule change filing with the SEC. Non-fungible tokenized instruments are also not addressed by this approval.

The proposal becomes effective once DTC completes the requisite infrastructure buildout. No launch date has been confirmed yet.

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The Commission's finding: the rule is consistent with Section 6(b)(5) of the Securities Exchange Act, which requires exchange rules to prevent fraud, promote fair trade, and protect public interest.