The SEC’s new Innovation Exemption represents an important development in the evolution of tokenized equity markets in the United States. It also reinforces an approach Dinari Inc. (Dinari) has been building toward for years, using blockchain infrastructure to improve how equities are distributed, traded and settled while seeking to preserve the rights and protections of the underlying asset.
Earlier this year, Dinari, through its registered broker-dealer, Dinari Securities, LLC (Dinari Securities) launched access for U.S. investors to over 700 U.S. stocks and ETFs through dShares™. Built on the custodial model, dShares™ connect tokenized equities to underlying securities held in a brokerage account carried by our clearing firm, Alpaca Securities LLC, Member FINRA/SIPC and are designed to preserve the rights associated with those securities.
The SEC’s Innovation Exemption now begins to address the next layer of this market. The exemption provides conditional regulatory relief for certain trading venues and liquidity providers facilitating transactions in tokenized NMS stocks. Among its most consequential requirements, eligible tokenized securities must provide holders with the same rights and privileges as the corresponding traditionally held security. SEC Chairman Paul Atkins characterized the requirement simply as “No Synthetics.”
Dinari’s objective has never been to recreate economic exposure to a stock in a different form. It is to modernize the infrastructure around the security without compromising the characteristics that make it an equity.
The Innovation Exemption moves tokenized equities beyond issuance and distribution and into the trading layer of U.S. market structure. Qualifying tokenized NMS stocks can trade through new venues and liquidity models, including permissioned markets operating on public blockchain infrastructure, subject to the conditions of the exemption.
For Dinari, the exemption validates the approach behind dShares™ rather than requiring a change to it. The custodial model establishes the connection between the tokenized asset and the underlying security. The exemption creates a framework for that security to become more broadly tradable and integrated across new forms of market infrastructure without severing that connection or sacrificing the rights that come with it.
This is also where the distinction between tokenized securities and synthetic exposure becomes more consequential. A product that tracks the economics of a stock without carrying its underlying rights is fundamentally different from infrastructure that brings the security itself into a new market environment. The SEC’s framework recognizes that difference and makes investor protections a requirement for participation.
As this market develops, the opportunity extends beyond any individual trading venue. Tokenized equities can support deeper liquidity, greater interoperability and a broader range of financial applications while maintaining the rights and protections associated with the corresponding securities.
The Innovation Exemption is deliberately limited. It is temporary and conditional, with restrictions on eligible securities, trading volumes and participation, alongside requirements governing transparency, recordkeeping, market access and technology. The SEC is also seeking public comment as it evaluates how the framework should evolve.
But the direction is significant. The regulatory conversation around tokenized equities is moving beyond whether securities can be represented through blockchain infrastructure toward how the broader market around those securities should function.
Dinari has been designing for that market from the beginning. The custodial model, KYC and eligibility controls are not features layered onto the product after the fact. They are part of the architecture required to bring securities into new financial infrastructure without diminishing what investors own.
Over time, tokenized securities may trade across more venues, with deeper liquidity and a broader range of financial applications. The infrastructure around an equity can change substantially. The integrity of the security does not have to.
Read the SEC’s Innovation Exemption
Dinari Securities, LLC, Member FINRA/SIPC. Brokerage services are provided by Dinari Securities, LLC, a wholly owned subsidiary of Dinari, Inc. Accounts are carried and securities are held by our clearing firm, Alpaca Securities LLC, Member FINRA/SIPC, which is not affiliated with Dinari. Investing involves risk, including possible loss of principal. Not FDIC insured · Not bank guaranteed · May lose value. This article is for informational purposes only and is not investment advice or a recommendation. Check the background of Dinari Securities on FINRA’s BrokerCheck.
