SEC Gives Green Light to On-Chain US Stocks: Five-Year Regulatory Exemption, Uniswap V4 Targets $79 Trillion Market

Author: Uniswap

Compiled by: TechFlow

TechFlow Insights: Wall Street has long operated on an order book mechanism, while the SEC’s Innovation Exemption Order requires deploying Automated Market Makers (AMMs) on public blockchains. The order took effect on September 17, 2026, establishing a new compliant trading venue category called Tokenized Security Venues (TSVs) and granting a five-year registration exemption to qualifying venues.

To date, cumulative trading volume for tokenized stocks on the Uniswap protocol has surpassed $20 billion. Based on Uniswap’s official interpretation of the Innovation Exemption Order, this article directly explains how AMMs are reshaping traditional market making and around-the-clock settlement systems, and how developers can utilize Uniswap v4 permissioned liquidity pool hooks to build compliant tokenized securities markets.

Wall Street relies on order books, while the SEC’s Innovation Exemption Order requires running Automated Market Makers (AMMs) on public blockchains.

On September 17, 2026, this exemption order granted a five-year exemption to a newly defined trading venue category: “Tokenized Security Venues (TSVs).” TSVs trade tokenized National Market System (NMS) stocks through permissioned liquidity pools.

Provided these venues meet the conditions set forth in the order, they will not need to register as national securities exchanges or alternative trading systems (ATS), and liquidity providers (LPs) complying with the requirements will not be deemed securities dealers.

To date, over $20 billion in stock tokens have been traded on the Uniswap protocol. This volume comes primarily from products such as Robinhood Stock Tokens and xStocks, as well as issuers like Ondo and Dinari. Equity exposure is already on-chain, and shareholder rights may be the next frontier.

The U.S. equity market represents a $79 trillion market. Automated Market Makers (AMMs) will transform how these assets are traded, who provides liquidity, and the barriers to entry for market makers. Below is our interpretation of the order and what it means for teams building on the Uniswap protocol.

AMMs Upgrade Market Infrastructure

AMMs automate much of the work traditionally done by professional market makers. Anyone can deposit assets directly into smart contracts to provide liquidity. This broadens the pool of potential market makers, increases market competition, and opens new pathways for issuers to build liquidity.

Pools operate continuously 24/7 throughout the year, enabling trading during nights, weekends, and holidays. Thousands of frontend interfaces worldwide currently connect to AMMs, allowing any newly created market to instantly access global distribution channels.

AMMs also expand the available trading pairs for assets. Taking NVIDIA stock as an example, it trades priced in U.S. dollars on traditional exchanges. On-chain, it can be paired with tokenized S&P 500 funds, money market funds, or cryptocurrencies.

Pairing highly correlated assets (such as NVIDIA and the S&P 500 index) helps reduce the relative price risk for liquidity providers. Thanks to automated routing systems, traders can still buy directly using any other asset.

We are already seeing early signs of such markets. In August this year, ten tokenized stocks and ETFs began trading with SPY as the quote pair on Robinhood Chain. Three months later, over 40 underlying assets established SPY liquidity pools, generating over $900 million in trading volume across 130,000 wallet addresses.

Demand for on-chain equities is real and continues to grow. TSVs offer financial institutions a completely new pathway to meet this demand.

How TSVs Operate

TSVs provide AMM liquidity pools on public, permissionless blockchains for approved participants. Compared to traditional stock exchanges, TSVs bear lighter regulatory obligations, and Liquidity Providers (LPs) do not need to register as dealers.

Running on AMMs also changes how settlement mechanisms operate. Under the current traditional system, brokers route your orders, exchanges or wholesalers handle execution, and clearing houses and depositories ultimately manage delivery and settlement.

In contrast, on TSVs, trading and settlement are completed atomically within a single on-chain transaction: either the exchange of funds and assets between both parties occurs simultaneously, or everything rolls back with no settlement occurring, eliminating the need for a central counterparty.

Listed companies have a say in whether their stocks trade on a TSV. TSVs must notify the stock issuer at least 30 days in advance and provide an opportunity to object. Once listed, any application connected to that pool can open trading services to approved users.

Figure: Comparison of traditional securities trading models vs. Tokenized Security Venues (TSVs) across dimensions such as trading venue, liquidity provision, clearing/settlement, and trading hours.

To qualify for the exemption, trading venues must satisfy a series of compliance conditions, including transparent fee disclosures, access control, limits on underlying assets and trading volumes, and circuit breakers. So, how can these rules be enforced on-chain?

Uniswap v4 supports powerful market structure customization through its Hooks mechanism, and our recently introduced Permissioned Pools hooks provide a robust infrastructure foundation for trading venues.

Permissioned Venues on Uniswap

Since launching in 2018, the Uniswap protocol has processed over $4.5 trillion in trading volume across more than 30 blockchains, with zero security incidents in its core smart contracts.

Uniswap v4 allows development teams to highly customize pool operation logic. Hooks are programmable code automatically triggered at specific nodes (e.g., before or after trade execution). Actual trade execution and fund settlement still occur on the base protocol, but operators decide who can trade, what assets can be traded, and when trading is permitted.

Figure: Architecture diagram of permissions hooks and liquidity pools for Tokenized Security Venues (TSVs) based on Uniswap v4.

Building Together with Uniswap Labs

Bringing equity assets on-chain is just the beginning; the deeper transformation lies in the evolution of market making practices and who qualifies as a market maker. As this exemption order rolls out, we look forward to collaborating with various teams to jointly explore how these new markets take shape in practice.

TSV Operators: We can demonstrate in detail how to use hooks to implement whitelist access controls, trading circuit breakers, and other pool-level compliance controls.

Asset Issuers: We can help you gain a deeper understanding of how tokenized stocks trade on AMMs and the boundaries of the Uniswap protocol’s capabilities.

Liquidity Providers (LPs): We can share research data on the actual behavioral characteristics of AMM liquidity and key shifts observed within permissioned liquidity pools.

If you are exploring how to build, issue assets, or provide liquidity under the Innovation Exemption Order framework, feel free to reach out to us anytime.

Disclaimer: Uniswap Labs does not operate, control, or participate in the daily operations of any Tokenized Security Venue. Any trading venue built on the Uniswap protocol operates independently under its operator, who assumes full responsibility for design decisions, legal analyses, and compliance with applicable laws (including the Innovation Exemption Order and its prerequisites).

The Innovation Exemption Order is temporary and conditional, subject to future changes. This article is for informational purposes only and does not constitute legal, financial, or investment advice, nor does it offer or invite the purchase, sale, or provision of liquidity for any securities or digital assets.