Ondo Finance is calling on the U.S. Securities and Exchange Commission (SEC) to postpone a proposed rule change from Nasdaq permitting the trading of tokenized securities.
In a letter sent on Wednesday, the tokenization company expressed worries about a perceived lack of transparency and a possible risk to equitable market access.
The concern revolves around Nasdaq’s initiative to revise its regulations to facilitate the trading of tokenized assets. Although Nasdaq anticipates that the Depository Trust Company (DTC), which functions as the central clearinghouse for U.S. securities, will manage post-trade settlements for these tokens, specifics regarding this process are still unclear.
“It depends on Nasdaq’s ‘preliminary sense’ of the procedure that it believes the DTC is considering for settling securities in tokenized form, yet there is no direct documentation supporting this,” Ondo stated. “This lack of clarity denies the Commission the necessary information to evaluate if the proposed rule change adheres to the standards set by the Securities Exchange Act of 1934 (Exchange Act).”
Ondo, which provides tokenized offerings such as short-term U.S. Treasuries and access to U.S. equities through blockchain tokens, pointed out that unequal access to information can advantage larger established firms.
In contrast, smaller or newer companies struggle without the data required to strategize or react to market dynamics.
Ondo indicates it could back Nasdaq’s initiative if the DTC publicly shares its procedures. Until that time, it is requesting the SEC to initiate a formal review that could result in rejection of the proposal.
