THE SEC DID NOT PROPOSE A RULE — IT SIGNED A FIVE-YEAR PERMISSION SLIP THAT CAPS THE BIG NAMES AT A QUARTER OF ONE PERCENT OF DAILY VOLUME

Every write-up of this ran the winners. Coinbase, Robinhood, Circle, analysts say. Nobody ran the caps, and the caps are the whole document.

Release No. 34-106402 is not a proposed rule. It is a temporary conditional exemptive order, signed September 17, in force the moment it was signed, expiring September 17, 2031, with a request for comment attached. It lets a “Tokenized Securities Venue” trade stock without registering as an exchange, and it lets some automated liquidity providers off the dealer hook. Then it fences the yard. On the big names, the S&P 500 and Russell 1000 constituents, a venue “cannot exceed 75 symbols traded and 0.25 percent of the average daily share volume.” On everything else the ceiling is 250 symbols and 2.5 percent. The contracts “must be auditable, public, and deployed on a public, permissionless distributed ledger.” Trades print within ten minutes. When the real stock halts, the token halts. And you may not tell anyone you are registered with the Commission, because you are not.

Read that as a filing and not a slogan. A quarter of one percent of daily volume in the biggest names in the market is a sandbox with a fence around it, and the fence is the news. Chairman Atkins titled his own statement a bridge toward durable rulemaking, which is a man telling you the bridge is temporary. Anyone sizing a revenue opportunity off this order without naming the cap is selling you the yard and not showing you the fence.

At the time of this writing, bitcoin was $81,245.