Firm files notice with SEC under 'Innovation Exemption' regime
Solana-based DEX Orca's AMM technology to power the platform
Forward Industries, Galaxy Digital and Exodus Movement to be first listings
A platform that allows investors to trade US-listed stocks on a blockchain around the clock is set to launch in early 2027, preserving the same voting rights and dividend entitlements as conventional shares while removing trading-hour restrictions and speeding up settlement.
Formation Securities notified the Securities and Exchange Commission on Monday (local time) of its plan to operate a Tokenized Securities Venue, or TSV, built on the Solana blockchain, according to the digital asset industry. The company aims to begin trading tokenized shares of three US-listed companies in early 2027.
The initial lineup includes NASDAQ-listed Forward Industries (FWDI) and Galaxy Digital (GLXY), along with Exodus Movement (EXOD), which trades on the NYSE American market.
The project uses the "Innovation Exemption" regime the SEC introduced in September. Under that framework, the regulator granted a temporary exemption allowing qualifying operators to run tokenized stock trading platforms without registering as a formal securities exchange. The exemption runs for five years and carries restrictions on the number of tradable securities and trading volume.
Tokenized stocks represent the rights of conventional shares encoded as tokens on a blockchain. Formation's tokenized shares are designed to carry the same shareholder rights as the underlying shares, meaning investors who hold shares in token form can still exercise voting rights and receive dividends just as ordinary shareholders do.
Trading hours and settlement mechanics would also change. Verified investors would be able to store tokenized shares in personal digital wallets and trade them 24 hours a day, seven days a week using stablecoins and other eligible assets. Because shares and payment are exchanged simultaneously on the blockchain, the system is designed to reduce the settlement delays and counterparty risks that can arise in conventional securities markets.
The trading system will use the automated market maker, or AMM, technology of Orca, a Solana-based decentralized exchange. Since launching its service in 2021, Orca has recorded cumulative trading volume of $550 billion through late October this year. The tokenized shares available for trading will be supplied by Superstate and Securitize.
Carlos Domingo, CEO of Securitize, said the trading platform focuses on matching trades and securing liquidity, while Securitize supplies the tokenized shares to be traded there. "Each of Securitize's Convertible Entitlement Tokens is backed by one actual share held in custody by an affiliated broker-dealer," Domingo said. "Only verified investors can hold these tokens, and holders have the same voting rights and dividend entitlements as holders of the underlying shares."
Beyond its own platform, Formation plans to expand trading access through Alpaca, CoinList's Passage and Jito's JTX. The company is also pursuing integration with digital asset custody and management firms including Anchorage Digital, BitGo and Fireblocks.
Formation also plans to grow the number of listed securities by working directly with share issuers. Issuers will be able to monitor blockchain transaction records in real time, while the official shareholder register will continue to be maintained by a transfer agent as usual.
Christopher Montagnano, CEO of Formation, said listed companies need a clear reason to tokenize their shares for the tokenized stock market to take hold. "We will seek the consent of issuers and grow the market together with them," he said. "Our goal is to build a transparent market where investors can buy and sell shares outside regular trading hours and settle faster on the blockchain, while retaining all their rights as shareholders."
Orca issues its own governance token, ORCA. As of 9:33 a.m. Wednesday, the token was trading at $1.26, down 6.32 percent from 24 hours earlier.
kyoung@heraldcorp.com
