Say goodbye to the 4 p.m. closing bell: Your -2-

Under the proposal, these tokenized securities would carry full shareholder rights and share the same CUSIP as the underlying stock. If the SEC approves and the Depository Trust Co., the central securities depository subsidiary of the Depository Trust & Clearing Corp., completes its blockchain-based settlement system, the first token-settled trades could go live as early as the end of this September - the first time tokenized securities trade on a major U.S. exchange. That conditionality is not theoretical. In late 2025, SEC staff granted no-action relief to the Depository Trust Co. for a pilot version of tokenization services. The relief allows DTC to explore tokenized representations of securities held in its custody, with positions mapped to approved blockchains and transferred only between whitelisted, regulated wallets. The Depository Trust & Clearing Corp. has framed the initiative as an incremental modernization of post-trade plumbing rather than a wholesale rewrite of market structure, with an initial rollout targeted for the second half of 2026. That timeline broadly aligns with Nasdaq's ambitions, but it also underscores the reality: Tokenized settlement in U.S. equities will arrive first as a tightly permissioned pilot, not an open on-chain free-for-all. Whether that model proves sufficient - or constraining - will shape how fast tokenized equities can scale beyond early adopters. What this means for investors - and what to watch For investors holding traditional brokerage stocks or weighing exposure to this shift, the implications are immediate. For investors (especially those holding shares in large brokerages) and market watchers, the rise of tokenized stocks demands attention. -- Re-evaluate brokerage exposure: If you own shares in brokerages that rely heavily on lending, custody fees or clearing infrastructure, their business models may face long-term pressure. -- Watch who invests in tokenization infrastructure: Custodians, token issuers, blockchain-native finance firms may emerge as the new "winners." -- Monitor regulatory developments: The gap between promise and practice remains wide. Regulatory clarity - on custody, reporting, rights and trading venues - will determine whether tokenized equities scale. -- Treat tokenized stocks with caution: Until tokenization reaches scale and governance is standardized, tokenized equities remain experimental. Liquidity, rights and transparency vary widely by structure and issuer. Traditional brokerages do have one advantage: They still hold the customer relationships. But if they wait for perfect regulatory clarity before building, they'll find the rails already laid by others. The window between "framework announced" and "market structure ossified" will be measured in quarters, not years. By the looks of it, 2026 is when tokenization stops being theoretical. It's also when the power map of equity markets gets redrawn and those caught watching from the sidelines may find there's no easy way back in. More: After bitcoin's fall, pity those wildly enthusiastic investors who borrowed billions against crypto Also read: Trump's misguided crypto policies threaten America's banks -Jurica Dujmovic This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal. (END) Dow Jones Newswires 02-21-26 1306ET