What a tokenized securities venue is
On September 17, the SEC issued its innovation exemption, establishing a five-year framework that allows U.S.-listed stocks to trade onchain through what it calls tokenized securities venues. Formation TSV is the venue we intend to operate under that framework.
A TSV is not a new exchange in the traditional sense. It is a set of onchain liquidity pools, a registry of verified participants and the controls that connect them, operated under the conditions the Commission set out and disclosed in a public notice that we keep current on this page.
Eligible assets
Eligible securities are tokenized representations of U.S.-listed equities issued by the issuer's registered transfer agent on Solana as Token-2022 mints. Each mint carries a transfer hook that enforces the issuer's allowlist, so a token can only move between wallets the issuer has approved.
Formation lists an asset only after the issuer, the transfer agent and the venue have agreed on the terms of issuance, the pool structure and the disclosures that apply. The first listings will be announced in the public notice before trading begins.
Who can participate
Participation is limited to wallets that have completed verification through the Formation registry. The registry holds one KYC record per participant, the issuer approvals attached to it and the results of sanctions screening. Individuals, institutions and broker-dealers can be verified directly or through an integrated platform.
- Individuals who meet the eligibility requirements described in the public notice
- Institutions and funds allocating to tokenized equities
- Broker-dealers and registered platforms routing orders on behalf of their customers
- Liquidity providers supplying concentrated ranges to a pool after verification
Settlement and custody
Every trade on the venue is a single Solana transaction in which the tokenized shares and USDC change hands at the same time. There is no clearing interval and no counterparty exposure between execution and delivery.
Participants hold tokenized shares in their own wallets or with a qualified custodian of their choosing. Holders keep the dividend, voting and other rights attached to the underlying shares, administered by the transfer agent.
Limits, halts and oversight
The venue operates subject to the volume limits, trading halts and maintenance windows set out in the public notice, and to the risk controls Formation applies at the pool and the wallet. We report to the Commission on the schedule the exemption requires and publish updates here.
Formation is formed by two U.S.-built companies and headquartered in New York. We plan to pursue the licenses needed to expand the venue's offerings over time, connecting American issuers with global capital and American investors with tokenized global assets.