The U.S. Securities and Exchange Commission is set to further delay an anticipated “innovation exemption” for tokenized securities trading, according to CoinDesk, which cited three industry sources familiar with the matter. The proposal had been expected to ease regulatory hurdles for firms that want to issue and trade tokenized securities on blockchain rails while remaining under existing securities laws, CoinDesk reports. The outlet says at least part of the exemption had been expected as soon as Friday, in connection with an SEC open meeting on a separate “Reg Crypto” rulemaking. That meeting is now off. CoinDesk reports the SEC canceled the Friday session late Thursday. The planned Reg Crypto discussion was described as a parallel effort focused on rules for projects raising funds through tokens, while the tokenization exemption was a separate initiative that the SEC was expected to discuss at the same meeting rather than release through a formal notice-and-comment process. The delay appears to reflect both political and procedural concerns. According to CoinDesk, one person familiar with the talks said the White House was worried the exemption could disrupt congressional negotiations over the Digital Asset Market Clarity Act, a broader crypto-market-structure bill. The same source said industry participants have been told the exemption may have to wait for the outcome of that legislation. The report also points to internal legal questions at the SEC. CoinDesk says agency staff have become increasingly focused on whether the commission has the authority to grant broad relief of this kind, including whether it has completed enough economic analysis and followed the procedural steps needed to justify an exemption. Traditional financial firms are also pushing back, according to the report. CoinDesk says SIFMA, the Wall Street trade group whose members include major broker-dealers and investment banks, has emerged as a key source of resistance. SIFMA did not immediately respond to CoinDesk’s request for comment, according to the article. The market-structure issue is specific: how blockchain-based trading venues would fit inside existing equity-market rules. CoinDesk reports that SIFMA’s concerns include brokers’ best-execution obligations, which are built around today’s exchange-linked market structure. Those questions become more complicated if tokenized securities trade on decentralized venues or automated market makers, where prices and execution costs may not map cleanly onto traditional exchange quoting. CoinDesk also notes that the SEC in June proposed eliminating Rule 611 of Regulation National Market System, the Order Protection Rule, a step the outlet says has been widely viewed as removing a major regulatory obstacle to tokenized securities trading. SIFMA has argued, according to the report, that significant market-structure changes should be handled through an open and transparent process rather than exemptions or no-action relief. Who benefits: Incumbent broker-dealers and market-structure participants may benefit from a slower process that keeps major changes inside formal rulemaking or legislation. Firms seeking fast regulatory relief for tokenized securities face a less certain timeline. Who's exposed: Tokenization platforms and issuers that were planning around a near-term SEC exemption are exposed to delay risk. The SEC is also exposed to legal and procedural scrutiny if it tries to move broad market-structure changes through exemptions rather than a full public process.