SEC member: Tokenized securities are essentially still securities, and issuers must comply with the information disclosure obligations prescribed by securities law.

Odaily News The U.S. SEC Commissioner Hester Peirce stated today that tokenized securities are essentially still securities, and therefore market participants must fully consider and strictly comply with federal securities regulations when trading such instruments. Securities tokenization may be implemented by the issuer itself, for example, industrial or investment companies can tokenize their shares; it may also be operated by a custodian that holds securities issued by a third party, which may issue tokens linked to the securities it holds or tokenize the "securities rights" that investors have against the custodian. Buyers of such third-party tokens may face unique counterparty risks and other special risks. The issuer of tokenized securities must fulfill the information disclosure obligations stipulated by federal securities law. Market participants should more carefully assess the legal attributes of these securities and their corresponding regulatory requirements when distributing, purchasing, and trading tokenized securities. Market participants are advised to actively communicate with the Securities and Exchange Commission (SEC) and its staff when designing tokenization product plans. When technical characteristics necessitate adjustments to existing rules, or when regulatory requirements have become outdated or ineffective, the SEC is willing to work with the industry to establish reasonable exemption provisions and promote the regulatory framework to keep pace with the times.