Formation Securities files a Solana tokenised-stock venue notice, fourth on the SEC list

Formation Securities LLC has published a public notice, dated 9 Nov, that it “will operate a Tokenized Securities Venue (the “TSV”)” under the SEC’s Innovation Exemption. The same day, the SEC’s Division of Trading and Markets added the firm to its list of persons that have submitted written notice of an intent to operate a TSV. That list, last reviewed or updated on 9 Nov, now names four firms: TSV LLC (23 September), OKXICE TSV (4 October), Kephas Corporation, doing business as Perpetuals.com (14 October), and Formation Securities LLC (9 November).

The SEC page states that inclusion on the list “does not mean that the person meets the definition of “Tokenized Securities Venue” under the Innovation Exemption Order, nor does it mean that the person has established that it meets the conditions of the TSV Exemption,” and that the staff “does not pass upon the merits or accuracy of any TSV Notice.” Formation’s own notice says neither it nor the TSV “is registered with the Securities and Exchange Commission in any capacity for the activities performed under the TSV Exemption,” and that the TSV “is not subject to the fair access requirements applicable to registered national securities exchanges and alternative trading systems subject to Rule 301(b)(5) of Regulation ATS” and “is not subject to Regulation NMS.”

How the venue is intended to work

Formation, a Delaware limited liability company and a wholly owned subsidiary of Valcrest, Inc., intends to operate “a Solana-based venue for secondary trading of tokenized National Market System securities (“Tokenized NMS Stock”) by permissioned retail and institutional participants, including market makers, proprietary trading firms, and liquidity providers.” Tokenised NMS stock “may be tokenized by or on behalf of the issuer of the underlying NMS stock or by unaffiliated third-party tokenizers,” and “each trading pair will include a non-security crypto asset or tokenized money market fund.”

Trading “will occur through permissioned automated market maker liquidity pools (“AMM Liquidity Pools”) deployed on Solana and operated using licensed versions of the permissioned concentrated liquidity AMM (“Orca AMM”) smart contracts developed by Orca Management Company S.A. (“Orca”), together with a licensed version of Orca’s router and aggregator technology (the “Formation Router”).” “The TSV will not operate an order book, hold or take custody of TSV Participants’ assets or private keys, extend credit, or conduct primary offerings of securities.” Only wallets permissioned by the TSV may trade or provide liquidity, and only the TSV may create the pools. Governance would be offchain, by Formation’s board and officers. “The TSV will not be governed by any onchain governance.”

The notice says the TSV “intends to make the following Tokenized NMS Stocks available for trading upon launch: Forward Industries, Inc. (FWDI); Galaxy Digital Inc. (GLXY); Exodus Movement, Inc. (EXOD).” It “will update this Notice before making any additional Tokenized NMS Stock or paired asset available for trading.” It does not say whether those three names would be tokenised by or on behalf of the issuer or by an unaffiliated tokenizer. “As of the date of this Notice, the TSV has not received a Notice of Issuer Objection from any issuer.” For third-party tokenised names, Formation “will provide the required Issuer Notice and will not commence trading until the applicable notice period has elapsed without a timely Notice of Issuer Objection.”

“The TSV will operate 24 hours per day, seven days per week,” subject to trading stoppages. “Prices in the TSV’s AMM Liquidity Pools are determined by the applicable pricing algorithm. The TSV’s smart contracts do not use pricing oracles or any other external pricing market data.” Transactions “are executed by an eligible AMM Liquidity Pool smart contract and settle atomically on Solana.” The TSV “will make U.S. dollar-denominated transaction data freely and publicly available” at formationsecurities.com, covering the preceding 30 days and “is updated within 10 minutes of each transaction.”

The venue “will stop trading in a Tokenized NMS Stock concurrently with any halt or suspension in the underlying NMS stock on its primary listing exchange, including a Limit Up-Limit Down pause, market-wide circuit breaker halt, halt pending dissemination of material news, or suspension imposed by the SEC, a self-regulatory organization, or in connection with delisting proceedings.” It will also pause when required by the exemption’s volume limits: for LULD Tier 1, “a maximum of 75 symbols and trading volume not exceeding 0.25% of the prior month’s average daily volume (“ADV”)”; for Tier 2, “a maximum of 250 symbols and trading volume not exceeding 2.5% of the prior month’s ADV.” “Apart from the stoppages described in this section, the TSV does not currently apply circuit breakers or reference price bands.”

The exemption requires a TSV notice to be published “at least 30 calendar days before operating.” Counted from 9 Nov, that period runs to 9 Dec. Formation’s notice does not state a start date.

Why it matters

Analysis. This is a different market-structure design from a registered exchange or ATS. There is no order book, no Regulation NMS, and no SEC review of access denials. Prices would be produced by a concentrated-liquidity formula in permissioned pools, not by a displayed bid and offer, and Formation itself warns that token prices “may therefore differ from prices of the underlying NMS stock, particularly outside of regular U.S. exchange trading hours of the underlying NMS stock’s primary listing exchange or when liquidity in an AMM Liquidity Pool is low.”

The 30-day clock is a notice period, not an approval. The SEC has already said that appearing on its list does not establish that the conditions of the exemption have been met. Desks that may touch the product will want the still-unpublished fee schedule, the paired assets, whether the three launch names are issuer-tokenised or third-party tokenised, and how the 15-second quote refresh and slippage settings behave when the underlying is open. They will also want to see how Formation applies the exemption’s volume caps in practice, because those caps, not a conventional LULD band on the venue itself, are what would throttle activity.

The Midpoint has already covered TSV LLC’s first notice and OKXICE’s issuer-objection process. Formation is the fourth name on the list. The notice does not compare itself with those venues.

What we are watching

• Whether Formation publishes a revised notice naming paired assets, fees or a start date, and whether any issuer files a Notice of Issuer Objection.
• Whether Kephas Corporation, already on the SEC list as of 14 October, publishes a comparable public notice.

Sources

• Public Notice of Tokenized Securities Venue: Formation Securities LLC, Formation Securities LLC, 9 Nov 2026
• Innovation Exemption (TSV notice list), U.S. Securities and Exchange Commission, last reviewed or updated 9 Nov 2026