SEC Tokenized Stock Framework Faces Issuer Pushback as Broadcom, Verizon Object to OKX-ICE Listing
Key Takeaways
- •Eight newly disclosed objections, including from Broadcom, Verizon and UnitedHealth, appeared in OKXICE's October 15 public notice, bringing the total number of objecting issuers to nine, among them Cerebras Systems.
- •OKXICE, the joint venture between OKX and Intercontinental Exchange, notified the SEC on October 5 of plans to launch a tokenized stock venue initially targeting shares of 63 U.S.-listed companies, with former New York Gov. Andrew Cuomo as co-chair.
- •The venue would operate around the clock under the SEC's five-year Innovation Exemption, using Uniswap v4 liquidity pools on OKX's XLayer blockchain with stablecoin settlement and shares held one-for-one through a registered broker-dealer.
- •Nasdaq separately said it would opt out of having its own shares tokenized, citing the venue's failure to display best prices in real time or report to the consolidated tape.
- •The objections arrived before OKXICE began operating, and the notice did not disclose why the companies objected or whether the objections will alter the initial lineup of targeted companies.
The U.S. Securities and Exchange Commission's new framework for trading tokenized stocks is running into resistance from some of the very companies whose shares could trade on the venue, with Broadcom (AVGO), Verizon (VZ) and UnitedHealth (UNH) among the latest issuers to object.
Eight newly disclosed objections appeared in an October 15 public notice from OKXICE, the joint venture between crypto exchange OKX and Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, that is preparing to offer tokenized stock trading. The objections arrive before the venture has begun operating.
In addition to Broadcom, Verizon and UnitedHealth, the notice names AppLovin (APP), Applied Digital (APLD), Rocket Lab (RKLB), CoreWeave (CRWV) and Applied Optoelectronics (AAOI). In total, it lists nine objecting issuers, including AI chipmaker Cerebras Systems (CBRS), which had already formally opted out of being listed. The update did not disclose why the companies objected or when they submitted their notices, nor did it indicate whether the objections will alter the venue's initial lineup of targeted companies.
Nasdaq (NDAQ) has separately said it would opt out of having its own shares tokenized under the framework, according to an FAQ on its website. A Nasdaq spokesperson told the Wall Street Journal that the company does not want its shares trading on a venue that does not display best prices in real time or report to the consolidated tape, which aggregates stock market trading data across venues to give investors a single view of prices. Nasdaq is not among the nine issuers named in OKXICE's notice.
Path to onchain stock trading
OKXICE announced on October 5 that it had notified the U.S. Securities and Exchange Commission of plans to launch the venue, initially targeting shares of 63 U.S.-listed companies. Former New York Gov. Andrew Cuomo, the venture's co-chair, announced the move on X.
The venue would operate under the SEC's five-year "Innovation Exemption," issued September 17, which allows qualifying platforms to trade tokenized U.S. stocks using automated market makers and liquidity pools. Tokenized stocks are blockchain-based representations of shares.
OKXICE plans to operate around the clock — a departure from the fixed daytime sessions of traditional U.S. exchanges — using Uniswap v4 liquidity pools on OKX's XLayer blockchain, with trades settled in stablecoins, digital tokens typically pegged to the U.S. dollar. Under the model described in its notice, underlying shares would be held one-for-one against outstanding tokens through a registered broker-dealer, and token holders must receive equivalent rights, including dividends and voting rights.
Issuer doubts
The issuer pushback echoes findings from analysts at TD Securities led by Reid Noch, vice president of U.S. equity market structure.
