BlockBeats News, October 18th, Ondo Finance has requested the U.S. Securities and Exchange Commission (SEC) to delay or reject Nasdaq’s proposal regarding trading tokenized securities, citing that the exchange has failed to adequately explain the specific operation mechanism of its post-trade settlement system. The company warned that the plan may give existing market participants an unfair advantage.
Ondo, in its letter to the SEC, pointed out that without public information on how the Depository Trust Company (DTC) will manage the blockchain-based settlement process, regulators and investors will not be able to thoroughly evaluate the proposal. The DTC, as the core securities depository in the United States, plays a critical role in the clearing and settlement process. “Nasdaq’s citation of non-public information implies unequal access to information, depriving other companies of the opportunity for a fair review,” Ondo stated in the letter. While supportive of Nasdaq’s overall direction in driving the tokenization transformation, Ondo highlighted that the process lacks “open collaboration and transparent standards.”
Nasdaq submitted the proposal to the SEC on September 8th, seeking to amend rules to allow the trading of tokenized stocks — essentially traditional stock represented digitally on a blockchain. The proposal was published in the Federal Register on September 22nd, triggering a 45-day review period by the SEC, which can be extended until the end of December. If approved, tokenized stocks will trade concurrently with traditional stocks and settle through DTC’s upcoming blockchain system. Due to Nasdaq’s lack of public disclosure on how the DTC system will handle key processes such as reconciliation, record-keeping, and risk management, Ondo has requested increased transparency before approval is granted.
