SEC Trading Division Director Lays Out Tokenized Securities Framework and Joint CFTC Harmonization Push

The head of the SEC's Division of Trading and Markets laid out two structural priorities on Wednesday: building a regulatory framework to list and trade tokenized securities on existing market infrastructure, and harmonizing SEC rules with those of the Commodity Futures Trading Commission.

Jamie Selway, Director of the Division of Trading and Markets, delivered the remarks at the Piper Sandler Global Exchange & Fintech Conference in New York on June 4. The remarks, posted to SEC.gov, confirm that the Division has been executing on two discrete workstreams under Chairman Paul Atkins's direction since January.

The Tokenized Securities Framework

Selway said the Division is developing a framework to list and trade tokenized securities with "innovation without arbitrage" as its guiding principle. The phrase is intended to prevent market participants from using blockchain-based listings to escape obligations that apply to traditionally traded instruments.

Commissioner Hester Peirce clarified in May that a contemplated innovation exemption would cover only issuer-sponsored digital representations of existing equities, not synthetic instruments. Selway's June 4 remarks represent the Division's operational counterpart: staff-level work on the mechanics of how such instruments would actually list and trade.

The SEC-CFTC Harmonization Track

Selway described a parallel inter-agency effort with the CFTC to reduce rulebook conflicts. Division staff have identified three areas as initial targets: swap and security-based swap data reporting, portfolio margining, and product definitions.

He cited Chairman Atkins's March statement at FIA: "Firms should not be shuffled back and forth between regulators when a product touches elements of both regulatory frameworks."

The agencies have already moved in parallel on discrete products. The SEC issued a notice in February on CME's application to trade cash-settled single-stock futures. In May, it approved Nasdaq PHLX to list cash-settled Bitcoin index options.

Perpetuals: Classification Still Open

Selway also addressed the legal status of perpetual futures, the leveraged instruments common in offshore crypto markets. The CFTC approved Kalshi's Bitcoin perpetual as a futures contract on May 29. Selway said classification of perpetuals on other underlying assets remains a live question, and he expects "substantial industry comment in coming months."

He cautioned against expecting a clean process. "Successful harmonization will require patience and long-term thinking from market participants and investors alike," he said. "Venue shopping and unreasonable expectations will undermine our efforts."

Legislative Context

The Division's framework work runs alongside the legislative arc. The CLARITY Act — the House digital-asset market structure bill currently stalled in the Senate over an ethics amendment precondition — would codify the SEC-CFTC jurisdictional split for digital assets. Selway's remarks describe the regulatory groundwork the Division is building regardless of whether that legislation advances.