First tokenised stock venue files notice under SEC Innovation Exemption

A Puerto Rico company called TSV LLC has become the first firm to file a public notice under the SEC’s new “Innovation Exemption”. The exemption lets tokenised securities venues (TSVs) trade tokenised NMS stock through permissioned automated market maker (AMM) liquidity pools without registering as an exchange.

TSV LLC published its notice on 23 September, a day after the order appeared in the Federal Register. The SEC’s list of notice filers records the submission on the same date. The firm says it has not started operating. It will not do so until it is satisfied that the exemption’s conditions are met, or until it has any further relief it needs.

What the venue says it will do

According to the notice, TSV LLC is owned 50/50 by Ali Abrar and Ryan Trinkle. It plans to license the Tradecraft AMM software from Obsidian Software LLC and to run Daml applications on the Canton Network. Trading access will be permissioned. Identity, sanctions and eligibility checks will apply to retail investors, institutions, proprietary trading firms, liquidity providers and broker-dealers. The firm says it has not yet chosen a production identity-verification provider.

The order requires smart contracts to be deployed on a public, permissionless ledger. Canton discloses transactions selectively rather than broadcasting them, so TSV LLC says it will “promptly” engage SEC staff on whether its Canton architecture satisfies that condition.

The notice sets a baseline swap fee of 0.30% for a standard pool. Of that, 0.20% would normally go to liquidity providers and 0.10% to the venue. The firm says this is not a fixed fee and that rebates, incentives and negotiated arrangements are possible. Canton network charges would come on top. The notice adds that the venue is not subject to Regulation NMS or to the fair-access rules that apply to exchanges and ATSs.

The framework

The SEC issued the order on 17 September. Under it, a TSV must publish its notice at least 30 calendar days before it starts operating. Other conditions:

• Rights: the venue must verify that tokens carry the same rights as the underlying shares.
• Third-party tokens: issuers must get written notice and a chance to object before a third-party token is traded.
• Trading halts: the venue must halt whenever the primary listing market halts.
• Volume caps: for stocks in LULD Tier 1, a venue is capped at 75 symbols and 0.25% of the prior month’s average daily share volume. For Tier 2 the caps are 250 symbols and 2.5%.

The relief expires five years after publication. The SEC is also seeking comment under File No. 4-927.

“The Innovation Exemption, while temporary, would allow TSVs to trade tokenized NMS stock in a permissioned environment today,” SEC Chairman Paul Atkins said when the order was issued.

By 21 October the SEC’s list had three names: TSV LLC, OKXICE TSV (4 October) and Kephas Corporation, trading as Perpetuals.com (14 October).

Why it matters

The volume caps keep any single TSV small next to the national market system. Even so, venues and market makers now have a concrete model to price against. The 0.30% headline AMM fee is far wider than the access fees and spreads institutional desks pay on lit and dark venues in large caps, so early flow is more likely to be retail or crypto-native than routed institutional orders.

Brokers should note that a TSV is outside Reg NMS. Prices on these pools will not be protected quotations, and any best-execution policy that touches them will need its own rationale. The open question over Canton matters too. If the SEC reads “public, permissionless” strictly, privacy-focused ledgers favoured by institutions may need separate relief.

Sources

• TSV LLC, Public Notice Pursuant to SEC Release No. 34-106402, version 1.0, 23 September 2026 — https://www.tokenizedstockvenue.com/notice-1.0.html
• SEC press release 2026-90, 17 September 2026 — https://www.sec.gov/newsroom/press-releases/2026-90-sec-issues-innovation-exemption-facilitate-trading-tokenized-nms-stock-request-comment
• Innovation Exemption Order, Federal Register, 22 September 2026 — https://www.govinfo.gov/content/pkg/FR-2026-09-22/html/2026-19388.htm
• SEC Division of Trading and Markets, Innovation Exemption page (updated 21 October 2026) — https://www.sec.gov/about/divisions-offices/division-trading-markets/innovation-exemption