U.S. SEC Commissioner Peirce Encourages Firms to Engage with Regulators on Tokenization

According to The Block, SEC Commissioner Hester Peirce told CNBC that the SEC welcomes asset managers exploring novel ETF structures and tokenized financial instruments to proactively engage with regulators. Peirce emphasized that the SEC is not a "value judge"; its role is to ensure products disclose risks appropriately, not to assess the merits of investment products themselves. She also noted that the SEC is currently intensifying its review of highly leveraged ETF structures, requiring issuers to demonstrate that their products comply with the securities law framework. In the tokenization space, Peirce revealed that SEC staff are examining a "narrowly scoped" innovation exemption to permit limited testing of tokenized securities within the existing regulatory framework, while ensuring investor protections are not weakened. Peirce stated that as more companies seek regulatory guidance on tokenization projects, the SEC will continue to maintain close communication with the industry.