SEC Staff Clarifies Custody Rules for Tokenized Stocks and Bonds

The US Securities and Exchange Commission’s Trading and Markets Division on Wednesday laid out how broker-dealers can custody tokenized stocks and bonds under existing customer protection rules, signaling that blockchain-based crypto asset securities will be slotted into traditional securities safeguards rather than treated as a new category.

The division said it would not object to broker-dealers deeming themselves in possession of crypto asset securities under existing customer protection rules, as long as they meet a set of operational, security…