Eight firms have now joined the Issuer Sponsored Token Coalition, an industry working group convened by Bullish and Equiniti to build the plumbing required for tokenized U.S. equities that carry genuine shareholder rights. Qube Research & Technologies ($38B+ AUM), Vertalo (SEC-registered transfer...
"Much of what's marketed today as 'tokenized equity' isn't equity at all. Investors think they own the share, and they don't." — Naureen Hassan, CEO, DriveWealth
Eight firms have now joined the Issuer Sponsored Token Coalition, an industry working group convened by Bullish and Equiniti to build the plumbing required for tokenized U.S. equities that carry genuine shareholder rights. Qube Research & Technologies ($38B+ AUM), Vertalo (SEC-registered transfer agent), and Zero Hash ($1B valuation, $65B+ settled volume) joined the coalition on October 26, adding quantitative market-making, registry infrastructure, and custody-clearing capacity to a group that already included Alpaca, Apex Fintech Solutions, and DriveWealth.
The coalition meets with public-company issuers at the New York Stock Exchange on October 27 to discuss adoption. Its formation follows the SEC's September 17, 2026 Innovation Exemption — a five-year conditional order permitting on-chain trading of tokenized NMS stocks through Tokenized Securities Venues (TSVs) for the first time in U.S. regulatory history.
The tokenized equities market reached $4.87 billion in September 2026, up from roughly $800 million in January. But size alone is misleading: through mid-2026, no major issuer had passed a binding shareholder vote through to token holders. The coalition exists to close that gap, linking on-chain tokens to official shareholder registers so holders receive voting rights, dividends, and corporate-action entitlements identical to those of traditional shares.
The Issuer Sponsored Token Coalition was formed September 24, 2026, as a non-exclusive industry working group. Each member occupies a distinct position in the securities lifecycle:
| Member | Role | Scale | |--------|------|-------| | Bullish | Exchange operator, co-convener | NYSE-listed (BLSH) | | Equiniti (EQ Group) | Transfer agent, shareholder-record infrastructure, co-convener | Manages registers for 1,100+ issuers | | Alpaca | API-first brokerage infrastructure | Commission-free stock trading APIs | | Apex Fintech Solutions | Clearing, custody, brokerage services | Custodian for 100M+ accounts | | DriveWealth | Fractional-share brokerage infrastructure | Powers 100+ global partners | | Qube Research & Technologies (QRT) | Quantitative market-making, liquidity | $38B+ AUM; 30% net return in 2025 | | Vertalo | SEC-registered digital transfer agent, tokenization | $500M+ assets on-chain, 100+ issuers | | Zero Hash | Custody, clearing, settlement infrastructure | $65B+ settled, $1B valuation |
The addition of QRT is notable. A $38-billion quantitative hedge fund providing liquidity to tokenized equity pools signals institutional comfort with the venue structure. QRT's 13F filing for Q2 2026 showed a $108 billion portfolio spanning 4,244 stocks — the firm has the order-flow capacity to make tokenized markets functional rather than decorative.
Zero Hash brings the custody-clearing layer. The platform has settled over $65 billion across 7 million end customers in 106 countries. Its client list — Interactive Brokers, E*TRADE/Morgan Stanley, Stripe, Franklin Templeton — indicates the coalition is building for distribution through existing brokerage rails, not parallel crypto-native channels.
On September 17, 2026, the SEC issued two conditional, five-year exemptions enabling on-chain trading of "Tokenized NMS Stock" — digital tokens representing shares of U.S.-listed companies with identical economic, dividend, and voting rights to conventional securities. The exemptions expire September 17, 2031.
Exchange Exemption: Tokenized Securities Venues (TSVs) operating automated market makers (AMMs) and liquidity pools are exempt from the statutory definition of "exchange" under specified conditions.
Dealer Exemption: Firms providing liquidity to AMM pools receive conditional relief from dealer registration if they trade proprietary capital only, limit activity to TSV-exempted pools, and maintain no customer custody.
The volume caps are calibrated to prevent tokenized venues from disrupting primary-market price discovery:
| Tier | Eligible Securities | Max Symbols per TSV | Volume Cap | |------|-------------------|---------------------|------------| | Tier 1 | S&P 500, Russell 1000, select ETPs | 75 | 0.25% of prior-month avg. daily volume | | Tier 2 | Other NMS stocks | 250 | 2.5% of prior-month avg. daily volume |
Additional requirements:
Synthetic exposure vehicles, tokenized linked securities, security-based swaps, rights, and warrants are explicitly excluded.
The coalition's core thesis — that issuer-sponsored tokens must be distinguished from synthetic tokens — addresses a structural deficiency in the tokenized equities market.
According to a 2026 Cornell Business Centers analysis, through mid-2026 no major tokenized-stock platform had passed a binding shareholder vote through to token holders. The models in market prior to the SEC exemption operated predominantly through contractual claims layered on top of depositary or trust structures. Holders received price exposure. They did not receive the legal bundle of rights — voting, dividend entitlement, appraisal rights, corporate-action participation — that define equity ownership.
The history is instructive. Mirror Protocol, launched on Terra in December 2020, offered synthetic "mAssets" tracking U.S. stock prices. When UST depegged in May 2022, the collateral evaporated and holders recovered nothing — they had no claim on actual shares. FTX offered "tokenized stocks" through a partnership with CM-Equity and Digital Assets AG; when FTX filed for bankruptcy in November 2022, the status of these instruments became immediately uncertain. In both cases, the absence of direct linkage to official shareholder registers left holders without enforceable rights.
The Issuer Sponsored Token Coalition's stated objective is to eliminate this gap by connecting on-chain tokens to Equiniti's shareholder-record infrastructure, ensuring that a tokenized share on a TSV is legally identical to a share held at a traditional broker-dealer.
As Bullish CEO Tom Farley stated: "Tokenization will turn static, opaque assets into active, transparent digital shares."
The tokenized equities sector has expanded materially in 2026, though from a small base:
Within the broader tokenized real-world-asset market ($34.5B through August 31, 2026), equities represent approximately 8% of total value but generate 93% of on-chain trading activity, according to available tracking data.
Separately, over $300 million in tokenized stocks have been deposited into DeFi protocols — a 2,451% increase — indicating crossover demand between traditional equity exposure and DeFi yield strategies.
Securitize alone reported a tokenized equities market cap of $1.2 billion after a $251 million surge in 2026. Vertalo's platform has recorded $500 million in assets on-chain across 100+ issuers and 200,000+ investors.
These numbers remain small relative to U.S. equity markets (~$55 trillion total capitalization), but the growth rate and the involvement of regulated infrastructure providers represent a structural shift from the synthetic-token era.
The SEC's Innovation Exemption includes a critical mechanism: issuers must receive 30 calendar days' notice before a TSV tokenizes their stock, and they can object in writing to block it. This creates an operational challenge — tracking notices, deadlines, and objections across potentially hundreds of issuers and multiple TSVs.
Vertalo launched SecondParty on October 26, 2026, to manage this process. The platform connects issuers, TSVs, transfer agents, and tokenizers in a shared workspace.
As of launch, SecondParty's records list 14,042 token contracts representing 1,383 U.S.-listed stocks — indicating that tokenization activity is already underway at scale across the exemption framework.
Key functions include:
Dave Hendricks, Vertalo's CEO and chair of the Securities Transfer Association's Tokenization Committee, noted: "The 30-day objection window is the mechanism the SEC built in to give companies a say, and issuers are using it."
The existence of SecondParty underscores a practical reality: the Innovation Exemption is not a theoretical framework. Venues, transfer agents, and issuers are actively operationalizing it.
The coalition's structure reveals where economic value will concentrate in the tokenized equities stack:
Transfer agents (Equiniti, Vertalo) occupy the regulatory chokepoint. The SEC's May 2025 guidance allowing transfer agents to use distributed ledger technology as the official Master Securityholder File — without maintaining a duplicate off-chain copy — positions them as gatekeepers of legal ownership. Revenue here is registry-based: per-share fees, corporate-action processing, compliance services.
Clearing and custody (Zero Hash, Apex) capture settlement economics. With near-instantaneous on-chain settlement replacing T+1 cycles, the float income that traditional clearinghouses earn disappears — but the compliance, reporting, and OFAC-screening requirements create new service fees.
Market-making (QRT) captures bid-ask spreads and AMM pool yields. The dealer exemption allowing proprietary liquidity provision without registration reduces barriers, but the volume caps (0.25% for Tier 1, 2.5% for Tier 2) constrain early-stage profitability.
Brokerage distribution (Alpaca, DriveWealth) captures the retail-facing order flow. Fractional-share capability and 24/7 trading are the user-facing features; commission structures and payment-for-order-flow dynamics will determine margin.
The notable absence: exchanges. Tokenized equity trading on TSVs potentially routes around traditional exchange matching engines. The volume caps limit near-term disruption, but the five-year exemption window provides time for tokenized venues to build liquidity and demonstrate operational soundness — a precondition for permanent rulemaking.
The Issuer Sponsored Token Coalition represents infrastructure-building, not product speculation. The eight members are assembling the transfer-agency, clearing, custody, liquidity, and distribution layers required for tokenized equities to function as legally equivalent instruments to traditional shares.
The SEC's Innovation Exemption provides a five-year window. The volume caps ensure tokenized venues develop alongside, not in competition with, primary markets. The issuer-veto mechanism preserves corporate autonomy.
Whether the tokenized equities market, currently at $4.87 billion, reaches material scale relative to the $55 trillion U.S. equity market depends on execution across the stack: transfer agents must reliably maintain on-chain shareholder records, clearing infrastructure must handle corporate actions at scale, and liquidity providers must deliver tight spreads within the volume constraints.
The coalition meets at NYSE on October 27. The five-year clock is running.