Formation Securities plans Solana tokenized stock venue

By Elena Vasquez

Formation Securities has formally notified the US Securities and Exchange Commission that it plans to operate a tokenized securities venue on Solana, according to its filing. The New York-based firm, created through the merger of Solana-based DeFi protocols Orca and Loopscale, would use permissioned automated market maker pools for eligible tokenized stocks.

CEO Luke Truitt leads its New York team, and the proposal draws on the merged company’s trading and credit infrastructure while it pursues the required licenses. The notice signals intent, not authorization to trade.

What is Formation proposing?

Formation describes the venue as a Tokenized Securities Venue, or TSV, under the SEC’s innovation exemption. The contemplated activity is conditional secondary trading of eligible tokenized stocks on a qualified venue through an automated market maker: liquidity providers deposit assets into pools, and a formula sets the price when someone trades against them.

That model differs from a conventional order book, where posted bids and offers are matched. The pools would be permissioned, meaning they would not admit every wallet automatically. Solana itself is public and permissionless, but access to each liquidity pool would be restricted, a concession intended to address securities-law constraints.

Whether the SEC accepts those controls and Formation secures the required licenses remains unresolved. In plain terms, the proposal replaces open access with controlled pools, but it still needs regulatory clearance.

Which stocks qualify, and until when?

The SEC issued its innovation exemption on September 17, 2026, and the five-year relief runs until September 17, 2031. It grants temporary relief from certain Exchange Act definitions, allowing tokenized versions of National Market System stocks to trade through permissioned AMM pools on public, permissionless blockchains such as Solana.

Eligible tokens must carry the same economic and voting rights as the underlying traditional shares, and synthetic products are excluded. A token that merely tracks a share price without conveying corresponding ownership rights therefore falls outside the framework.

The temporary framework gives participants a defined regulatory runway, but it does not settle licensing or signal an extension. In plain terms, only ownership-linked tokenized stocks qualify, and the relief has a fixed end date.

Is Solana ahead in the tokenized-equity race?

Formation is not the only applicant. By late October 2026, at least three entities had submitted notices to the SEC: Formation on Solana, TSV LLC on Canton Network and OKXICE on X Layer. Those filings place three networks in a contest for regulated tokenized-equity activity, although a notice does not show that a venue has cleared licensing.

Solana has relevant operating history: Forward Industries has been trading on Orca since November 2025. Formation says the merger combines trading rails with credit infrastructure that a securities venue can use. That background supports technical readiness, but it does not establish customer demand or regulatory approval.

Operationally, the plan would place controlled market access on a public chain and link it to a licensing process. For Solana, the filing offers a reputational gain before a single regulated trade has cleared.

The proposal as described provides no fee schedule, customer commitments or completed license. In plain terms, Solana has entered a three-network contest, but filing volume does not equal operating venues.

What must happen before trading begins?

Formation still has to pursue the licenses required for the venue before it can operate compliant pools. The SEC innovation exemption expires on September 17, 2031, unless the agency extends or formalizes the rules, leaving any venue built on the framework with a defined deadline. The filing does not set a launch date.

Formation’s next checkpoint is licensing, including approval of controls for a qualified TSV. Any broader market-structure change would depend on the SEC extending or formalizing the exemption, not on which network files first.

Formation’s license pursuit and any SEC action ahead of September 17, 2031 will determine whether the filing becomes a functioning venue or remains a notice. In plain terms, the proposal has a regulatory process to clear and a fixed policy deadline.