Key Institutional Prerequisite for Tokenization: Issuer Authorization

Recently, OKXICE faced opposition from 26 listed companies, while the Hong Kong SFC approved secondary trading of tokenized public funds. Three sets of cases point to the same observation: the sustainable implementation of tokenization cannot ignore issuer authorization.

Written by: EX.IO Research

Introduction

In the past week, several events in the global capital markets have made the institutional boundaries of "asset on-chain" clearer.

Nasdaq, the Hong Kong Securities and Futures Commission (SFC), and Janus Henderson have all made new progress regarding related projects or regulatory arrangements; during the same period, ICE and OKX's joint venture OKXICE faced opposition from 26 listed companies. These companies have successively expressed their disagreement with the proposed arrangement to tokenize their shares.

From publicly available information, the difference lies not only in technology or whether tokenization is adopted, but in a core issue: whether the issuer of the relevant assets agrees to and participates in the arrangement.

I. A Divergence Worth Noting: The Legal Relationship Between Tokenized Securities and Issuers

The term "tokenization" has been widely used in recent years, but it can correspond to at least two different legal and operational structures.

First: Non-Issuer Dominated (issuer-bypass). Third parties can link the stock prices of listed companies to on-chain "synthetic tokens"; such arrangements do not necessarily rely on the issuer's consent, official shareholder register, or direct transfer of underlying securities. Its advantage lies in deployment speed, but legal rights, regulatory classifications, and execution arrangements need to be clarified separately.

Second: Issuer Dominated (issuer-sponsored). Issued by listed companies, asset managers, or licensed institutions, their stocks or fund shares are issued in token form; on-chain records connect with the official shareholder register, and token transfers correspond to the transfer of the underlying securities themselves.

Recent events, along with Nasdaq's related approval documents from March this year, can be seen as a contrast between the two paths in terms of regulatory and market responses: the non-issuer dominated path has encountered concentrated objections from issuers; the issuer dominated path continues to advance in different jurisdictions.

II. United States: Nasdaq and ICE Adopt Different Paths

This comparison is particularly evident in the related proposals of the two major exchange parent companies in the United States.

Nasdaq: Issuer Dominated (issuer-sponsored). It submitted a proposal to the SEC in September 2025 and received approval in March 2026. Nasdaq President Tal Cohen summarized the core design as the "issuer-sponsored approach," placing listed companies at the center of the equity ecosystem. Its technical and legal arrangements are also critical:

• The design goal is to ensure that token transfers and underlying securities transfers have equal legal and regulatory effect;
• On-chain records directly access the issuer's official shareholder register;
• According to the relevant proposal documents, it advances through a complete exchange rule approval process (SR-NASDAQ-2025-072), rather than relying on regulatory exemptions.

In other words, Nasdaq's design positioning is not to create a new independent asset but to allow the same security to exist in another form of record and transaction.

ICE, the parent company of the New York Stock Exchange, adopted another path that is faster in deployment but has higher legal and execution uncertainties. In March 2026, ICE invested in OKX at a valuation of $25 billion and obtained a board seat; in June, it established a joint venture OKXICE with a 50% stake each; on October 4, it submitted a proposal to the SEC to tokenize 63 NYSE-listed stocks and provide 24/7 trading.

This proposal does not adopt Nasdaq's exchange rule approval path but is based on the "Innovation Exemption" launched by the SEC on September 17, 2026. This is a five-year conditional exemption that allows tokenized stocks to be exempt from certain exchange registration, Reg NMS, and consolidated quotation requirements under certain conditions, and can be traded through automated market makers and liquidity pools.

According to interpretations from several U.S. law firms (Davis Polk, Skadden, Sullivan & Cromwell, Gibson Dunn), the exemption adopts an opt-out mechanism of "if the issuer does not object within 30 days, it is deemed to agree," rather than requiring the issuer to actively consent. This is a third-party legal interpretation, and the final authority should still be based on the SEC's official rules and applicable documents.

This opt-out mechanism subsequently triggered a chain reaction:

Within two weeks, the total number of objections increased from 9 in the first round to 26. It is noteworthy that although ICE is the parent company of the NYSE and has a listing relationship with the relevant listed companies, it still chose to advance under the opt-out mechanism of the innovation exemption rather than a proposal based on active authorization from the issuer. Subsequently, the relevant listed companies utilized the 30-day objection window to express their opposition, indicating that issuer consent has become an institutional variable that cannot be ignored in such arrangements.

III. Funds: Why the Janus Henderson Case is Worth Referencing

At the same time, another directional case has also attracted market attention.

Janus Henderson— a global asset management company managing approximately $500 billion (approximately half a trillion) according to company standards— collaborated with the RWA infrastructure company Centrifuge to issue JQQQ on the Stellar chain, a tokenized fund tracking the Nasdaq 100 Index. This fund is only open to qualified professional investors outside the U.S., with a minimum subscription amount of $100,000.

It is positioned as "the first blockchain native fund offering exposure to the Nasdaq-100 Index through an issuer-sponsored investment strategy," meaning it is the first blockchain-native fund providing exposure to the Nasdaq 100 Index through an issuer-sponsored investment strategy, and has obtained official authorization from the Nasdaq 100 Index.

Why does this model face different challenges compared to third-party synthetic stock tokens? The key lies in the fact that fund shares are originally issued by the asset management company, and issuer authorization is inherent in the product structure, eliminating the need to bypass other issuers; the relevant arrangement mainly involves issuing and recording existing shares in a blockchain-native form. In contrast, third-party synthetic tokens that do not have issuer authorization may face additional legal, regulatory, and execution uncertainties.

IV. Hong Kong: SFC Approves Secondary Trading of Tokenized Public Funds

If we observe the two paths in the U.S. side by side, Hong Kong provides another sample of a regulated market.

On October 26, 2026, the Hong Kong Securities and Futures Commission (SFC) approved secondary market trading of tokenized public funds, involving tokenized shares of two ChinaAMC money market funds trading on licensed virtual asset trading platforms (VATP). The SFC officially referred to it as "the world's first example," but this statement should be understood within the scope of "public funds": secondary trading of tokenized fixed-income products aimed at professional investors has earlier precedents in Hong Kong.

The regulatory significance of this approval is partly reflected in its wording: "SFC-licensed VATP" and "SFC-authorized fund". Its institutional foundation is neither the Nasdaq exchange rule amendment path nor the innovation exemption adopted by OKXICE, but rather Hong Kong's framework of "licensed asset management + licensed trading platform."

It should be noted that this framework from the SFC is not the same as Nasdaq's single stock on-chain mechanism. Fund shares are originally issued by the manager (ChinaAMC) and recognized by the SFC, thus its issuer dominance is inherent in the fund structure, rather than requiring separate consent from the listed issuer for the relevant tokenization arrangement like a single stock.

Therefore, this approval in Hong Kong can be understood as an important regulatory practice of "issuer dominance + regulated secondary trading" in Asia, rather than a general recognition of all tokenization structures.

V. Future 6-12 Months: Three Observational Signals

By observing these three chains of evidence together, it can be seen that market and regulatory practices are driving issuer authorization from a principled demand to a gradually verifiable institutional arrangement. In the next 6-12 months, three signals can be monitored, but their development still depends on formal rules, regulatory decisions, and actual execution.

Signal 1: Whether the SEC will adjust the opt-out to affirmative consent (active consent). The 26 issuers utilized the 30-day objection window to concentrate their opposition, indicating that the preset consent mechanism may not have addressed the issuers' demands. If formal rules make relevant revisions, it will further support the judgment of issuer authorization as a hard institutional threshold; currently, it should still be based on the SEC's official documents.

Signal 2: The progress of Nasdaq's issuer-sponsored proposal for launch in the first half of 2027. If it can be implemented as planned, it will provide a reference case for the "exchange rule approval + official register" path in the U.S. and may influence the market's relative assessment of the exemption path.

Signal 3: Whether Hong Kong will approve a second batch of tokenized funds and whether the applicable investor scope will be expanded. According to 26PR174 and related arrangements, the current main applicable scope is institutional/professional investors. If subsequent products expand or extend to retail investors, the demonstration effect of Hong Kong's "licensed asset management + licensed VATP" framework may further expand; any expansion still requires formal approval from the SFC and applicable investor protection requirements.

VI. EX.IO Research Perspective

We summarize the above observations into three points.

First, the important boundary of tokenization is not just the asset form, but issuer authorization and corresponding legal arrangements. Single stocks, index funds, and money market funds can all be put on-chain in different forms; from the above cases, the issuer-sponsored structure can more clearly connect issuers, official records, and regulatory frameworks. In contrast, synthetic tokens or exemption paths that bypass issuer authorization, even if supported by large exchange groups, may still face objections from issuers and regulatory execution challenges.

Second, this mainly reflects the evolution of institutions at the settlement and record levels, rather than a revolutionary change in the legal attributes of securities. Tokenization has the potential to improve the efficiency of clearing, settlement, and register management, supporting faster settlements, 24/7 trading, and programmable corporate actions; however, it will not change the underlying property structure of securities issued by issuers and subject to applicable regulatory constraints. Any attempt to replace these legal arrangements solely with token technology must still address the issue of issuer authorization.

Third, the approval in Hong Kong has institutional positioning significance, rather than merely following other markets. The SFC provides an Asian sample for the issuer-sponsored route with "licensed asset management + licensed VATP," contrasting with the challenges faced by the innovation exemption in the U.S. market and the development of approved issuer-sponsored proposals. In our view, the institutional integration capability required for "issuer authorization + official register + regulated secondary trading" may be more difficult to replicate than pure on-chain technology.

Sources

The following are the main public sources cited in this article. The regulatory facts in the text are as of October 28, 2026, and relevant rules and arrangements may change thereafter.

1. Nasdaq Official Press Release (2026-03-09) --- Nasdaq

2. ICE Official Press Release (Investment in OKX) --- ICE

3. Business Wire (ICE and OKX Joint Venture, 2026-06-22) --- Business Wire

4. SEC Innovation Exemption (2026-09-17) --- SEC

5. Reuters (OKXICE Submits Application; 26 Companies Oppose) --- Reuters --- filing; Reuters --- objections

6. Janus Henderson Official Press Release (JQQQ) --- Janus Henderson

7. SFC Official Press Release (26PR174, Secondary Trading of Tokenized Public Funds) --- SFC 26PR174

8. Bloomberg (ICE Invests in OKX; $25 Billion Valuation) --- Bloomberg

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