SEC to Review Proposal for Tokenized Russell 1000 Stocks

24X National Exchange has filed a proposed rule change with the SEC to allow tokenized versions of Russell 1000 stocks and certain ETFs to trade on regulated markets. The proposal, which is still under review, would enable eligible securities to be traded in digital form through a Depository Trust Company pilot program.

Under the plan, tokenized securities would not be treated as a separate class with different execution priority, but rather would trade alongside their traditional counterparts, provided they are fungible. Participants who want tokenized settlement would use a digital flag when entering orders and provide wallet information where required.

The actual clearing and settlement process would still be tied to DTC's pilot framework, which is designed to test blockchain-based handling of eligible securities without abandoning the regulated clearing infrastructure that already supports US equity markets.