DTCC Obtains No-Action Letter From SEC’s Division of Trading and Markets Allowing New Securities Tokenization Service

Cleary Gottlieb represented the Depository Trust and Clearing Corporation and its subsidiary, the Depository Trust Company (DTC), in obtaining a no-action letter from the SEC’s Division of Trading and Markets (the Division) that allows a new securities tokenization service.

The letter provides that the Division would not recommend enforcement action against DTC under various provisions of, and rules under, the Exchange Act in order to allow DTC to launch a “Preliminary Base Version” of its securities tokenization program.

The Preliminary Base Version will allow DTC participants to elect to have their security entitlements to DTC-held securities recorded using distributed ledger technology, rather than exclusively through DTC’s current centralized ledger, giving DTC participants the ability to utilize the benefits of blockchain and tokenization technology.

Read the no-action letter.

The Cleary team included partners Brandon Hammer, Brant Brown, Hugh Conroy, and David Lopez, and associates Ben Rosenblum, Alec Mitchell, William Chao, Katherine Kennedy, and Marcus Holtzman.