NYSE Tokenized Equities Alternative Trading Platform Launch

What You Need to Know:

• NYSE plans a tokenized equity ATS launching as early as Q2, enabled by SEC no‑action relief allowing DTCC to tokenize major equities and ETFs.
• The venue supports 24/7 trading with instant settlement, using NYSE’s existing matching engine and on‑chain reporting
• Fungibility is preserved between tokenized and traditional shares to reduce liquidity fragmentation.
• Trading plans on being NBBO during market hours, but operates as a parallel, non‑protected market.
• Retail is expected to dominate early activity, with RFQs supporting limited initial liquidity.
• Early participation is strategic to build data, expertise, and optionality ahead of broader adoption.

The New York Stock Exchange (NYSE) recently announced plans to launch a tokenized equity alternative trading system (ATS) as early as Q2 this year, building directly on the SEC’s recent no-action relief granted to the Depository Trust & Clearing Corporation (DTCC). That relief allows DTCC to tokenize every symbol in the Russell 1000 as well as major ETFs, regardless of issuer's preference. For companies outside the Russell 1000, or issuers that want to natively issue tokenized shares, NYSE intends to allow those versions to trade on the platform as well. This effectively frames tokenization as a market-wide infrastructure shift rather than an opt-in experiment.

NYSE’s design is closer to a “2.0” market structure change: a standalone ATS where custody and settlement remain anchored at DTCC (though modifiable), trading is compliant with National Best Bid and Offer (NBBO) during market hours (but not protected), and is open 24/7 including weekends and holidays, with instant settlement from day one. Trades will occur using NYSE’s existing matching-engine technology, while reporting takes place on a public blockchain. Orders therefore still execute under price-time priority, building on today’s market structure, while avoiding the front-running risks inherent in block-based trading integrated on public blockchains.

While the venue introduces new rails and operational complexity, it deliberately preserves fungibility between tokenized and non-tokenized shares. This sacrifices some flexibility but significantly reduces the risk of fragmented liquidity and multiple token versions of the same security with different exposure profiles. Over time, that fungibility may be critical to preventing a splintered tokenized-equity ecosystem.

Today, U.S. exchanges are expected to move to 23/5 trading (closing 8–9 PM EST for corporate actions and system updates) by the end of 2026, though more realistically in 2027. Even current overnight ATSs remain closed Friday and Saturday due to next-day SIP reporting requirements. NYSE’s tokenized venue effectively bypasses these constraints, creating an entirely new trading environment.

NYSE plans to introduce multiple features over time. Recognizing liquidity will be limited initially, the venue will support request-for-quote (RFQ) functionality in addition to a standard order book. These RFQs will likely originate from retail participants, with institutions and market makers responding as liquidity providers. A taker-maker fee schedule may be adopted in this model to replicate Payment For Order Flow (PFOF).

Buy-side traders generally have limited appetite for instant settlement due to prefunding requirements and little interest in weekend or holiday trading. As a result, retail participants are expected to be the primary early users of the tokenized ATS. Over time, buy-side firms may instead seek broker-dealers willing to provide short term financing for these instant settlement trades, rather than operating on a fully prefunded basis. This dynamic is particularly important for retail brokers: longer settlement cycles materially increase clearinghouse margin requirements, as seen during the GameStop episode when margin calls reached billions of dollars. As a result, an instant-settlement venue that trades 24/7 may sound very appealing to them.

Retail activity already represents roughly 20% of total U.S. equity volume. However, it can reach 40–60% in some names on a given day and exceed 90% in meme stocks. If retail liquidity increasingly migrates to tokenized venues and becomes a meaningful share of available liquidity, institutional participation will eventually become less optional. For that reason, we intend to be early users of the venue, not because most of the buy side will immediately participate, but to build data, expertise and optionality ahead of a potential broader adoption.