Formation Securities has officially submitted a notice to the U.S. Securities and Exchange Commission (SEC) regarding its plans to launch a tokenized stock exchange on the Solana network. The trading venue is targeted to go live in early 2027, opening up equity trading 24 hours a day, seven days a week.
The market’s operations rely on the temporary Innovation Exemption framework announced by the SEC last September. This specialized rule provides experimental room for blockchain-based equity trading, provided that shareholders continue to receive dividends and retain full voting rights in public companies. The same regulation requires market operators to provide written notice at least 30 calendar days before trading third-party tokenized shares.
What sets this exchange apart from conventional equity markets is its direct integration with decentralized finance mechanisms.
Orca AMM Technology for Public Stock Trading
Formation Securities is licensing automated market maker (AMM) technology from decentralized exchange Orca. Through this system, verified investors can hold stock tokens directly in self-custody wallets and settle onchain buy and sell transactions using stablecoins.
Three U.S. public stocks are projected to be available at initial launch: Galaxy Digital, Exodus Movement, and Forward Industries. To bridge capital market assets onto the blockchain, Formation Securities has partnered with Superstate and Securitize as real-world asset infrastructure providers to facilitate stock token issuance within the market ecosystem.
Although transaction settlement takes place on the Solana network, official share ownership records will still be maintained by traditional transfer agents. This step ensures that investors’ direct ownership status in public companies remains intact.
Learning from the Rejection by 50 Issuers at OKXICE
Formation Securities opted for a collaborative approach by engaging issuers from the outset to avoid widespread pushback. This strategy reflects lessons from the OKXICE exchange initiated by OKX alongside the parent company of the New York Stock Exchange (NYSE), where more than 50 public companies opposed plans to tokenize their shares.
For capital market participants and crypto asset holders, this model illustrates how DeFi infrastructure is beginning to integrate with investor protection rules, including dividend and voting rights. Its operational certainty now hinges on technical readiness leading up to 2027 and adherence to the SEC’s notification deadlines.
Reported by Cointelegraph.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
