Peirce Calls on Regulators to Simplify Disclosure Rules to Advance Tokenized Securities Innovation Exemption Pilot

On March 12, Hester Peirce, the U.S. SEC commissioner known as the "crypto mom," spoke at an Investor Advisory Committee meeting, calling on regulators to avoid excessive market intervention and to consider simplifying corporate disclosure requirements while allowing limited innovation exemption pilots for tokenized securities.

Citing Adam Smith, the father of modern economics, Peirce argued that regulators should avoid attempting to shape market outcomes. She pointed out that public companies spend enormous time preparing mandatory disclosure documents, yet end up obscuring the critical information investors actually need. Therefore, she called on the SEC to simplify disclosure rules and genuinely improve information transmission efficiency.

In discussing tokenized securities, Peirce disclosed that the SEC is studying a possible "innovation exemption" mechanism that would allow limited experimentation with tokenized securities to assess how existing securities laws apply to blockchain-based markets.

Given that blockchain systems can enable faster settlement and in some cases complete transactions without traditional intermediaries, Peirce questioned imposing additional disclosure and intermediary requirements on tokenized securities based on these characteristics.

Additionally, tokenization is becoming an increasingly central issue of SEC concern. As early as last year, SEC Chairman Paul Atkins viewed tokenization as a major financial innovation and advocated that regulators should encourage rather than restrict it.

In December of that year, the SEC issued a no-action letter to the Depository Trust & Clearing Corporation (DTCC), allowing it to explore blockchain-based securities tokenization services.

This SEC move essentially gave DTCC the green light to develop infrastructure supporting blockchain settlement for traditional securities.

Moreover, Washington has recently been advancing broader discussions on crypto market structure legislation, and the outcomes of negotiations in these legislative processes could determine the ultimate regulatory direction and landscape for U.S. digital assets.

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