Key Highlights
- SEC Commissioner Hester Peirce discussed the Innovation Exemption during SIFMA’s Digital Assets Conference on September 23, 2026.
- Peirce described the exemption as two time- and size-limited exemptions designed to facilitate tokenized securities trading on crypto networks through automated market makers.
- She said the SEC wants tokenization to develop in U.S. markets and views the exemption as a bridge toward longer-term rulemaking.
Securities and Exchange Commission Commissioner Hester M. Peirce delivered remarks at SIFMA’s Digital Assets Conference in New York on September 23, 2026.
The speech, titled “Looking for Change in Haystacks,” occurred during her penultimate week as a commissioner. Peirce stated that her views are her own and not necessarily those of the SEC or her fellow commissioners.
Before addressing her primary topic, Peirce discussed the Innovation Exemption announced the previous week. She described it as two exemptions contained in one order. The Innovation Exemption is a time- and size-limited measure intended to facilitate the trading of tokenized securities on crypto networks through automated market makers. Peirce noted that Chairman Atkins characterized the exemption as a bridge toward durable rulemaking.
Comments on the exemption
The commission invited comments on the exemption. Peirce stated that SIFMA had already submitted a preliminary reaction. In developing the exemption, the commission sought to avoid disruption to the functioning of equity markets while addressing the introduction of tokenized securities.
Peirce said tokenization is approaching and expressed a preference for it to occur domestically rather than through overseas markets offering tokenized exposure to U.S. equities without a domestic alternative.
The stated goal is a final set of rules governing the intermediaries and venues that facilitate trading of tokenized securities in ways not covered by the existing regulatory framework. Peirce indicated she shared SIFMA’s interest in advancing the rulemaking process.
Background on the exemption
On September 17, 2026, the SEC granted a five-year conditional exemption from certain securities-market requirements for qualifying blockchain-based trading venues. The relief applies to qualifying tokenized securities venues handling certain National Market System stocks. It provides relief from specific Exchange Act exchange and dealer requirements and permits the use of permissioned automated market makers and liquidity pools.
The exemption is temporary and conditional rather than a permanent regulatory framework. One form of relief applies to a tokenized securities venue operating permissioned AMM liquidity pools; the other covers certain liquidity providers classified as covered firms. The exemptions expire five years after publication.
Securitize President Carlos Domingo, in a September 23 post, characterized the exemption as a limited framework applying to tokenized securities venues that meet defined requirements. Under Section 36(a)(1) of the Exchange Act, as described by Chairman Paul Atkins, the order grants two forms of relief.
The first covers a tokenized securities venue that operates permissioned automated market maker liquidity pools. The second applies to certain liquidity providers designated as Covered Firms. Both forms of relief are scheduled to expire five years after the order’s publication.
Peirce’s focus on financial surveillance
Peirce then turned to her main topic: rethinking financial surveillance in light of existing approaches and new technologies. She described a choice between continued expansion of data collection, intermediary surveillance, and know-your-customer requirements, and the use of new technologies to improve detection of illegal activity while collecting less personal information.
Peirce concluded that Americans deserve both security and privacy and that new technologies can support greater protection of data while improving detection of illegal conduct. She emphasized the value of continued conversation among regulators, regulated entities, and the public.
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