Who Keeps the Register: Four Ways to Hold a Tokenized Share

A treasury or investment committee asked to hold a tokenized share is usually asked whether the mandate permits tokenized instruments. That is the wrong question. The SEC staff has published a taxonomy that resolves these instruments into four materially different structures, and only two of them put the holder on the issuer's own ownership record. The rest of the difference is legal, not technological.

The Label Is Not the Instrument

The question that arrives at an investment committee is whether the mandate permits tokenized instruments. The question that matters is which of several materially different structures the specific instrument actually is, because they differ on whether the holder appears on the issuer's ownership record at all.

That distinction is not a technical footnote. It determines whether a holder receives a dividend or a reinvestment, whether a vote reaches the holder or stops at an intermediary, and whether the holder's claim survives the failure of a party the issuer has never heard of.

On 28 January 2026 the SEC's Division of Corporation Finance, Division of Investment Management and Division of Trading and Markets published a joint statement setting out the taxonomies of tokenized securities. It is the clearest available map of what these instruments are. It is also, by its own terms, a staff document: the statement records that it is not a rule, regulation, guidance or statement of the Commission, that the Commission has neither approved nor disapproved its content, and that it has no legal force or effect. It is a map, not a rulebook, and it deserves to be cited as one.

Read carefully, it does something more useful than describe technology. It sorts these instruments by where the record of ownership sits.

The Four Structures

The staff statement divides tokenized securities into two categories: securities tokenized by or on behalf of their issuers, and securities tokenized by third parties unaffiliated with those issuers. Each category contains two structures.

Issuer-sponsored, with the record on chain

The issuer or its agent integrates distributed ledger technology into the systems that record owners, so that a transfer of the token is a transfer of the security on the master securityholder file. The staff is explicit about how little else changes: the only difference from a conventionally issued security is that the master securityholder file is maintained on a crypto network rather than in offchain database records. The holder is on the register. The format changed; the ownership did not.

Issuer-sponsored, with the record off chain

The issuer issues the security conventionally and issues a token alongside it. Here the staff is equally direct, and the sentence deserves reading twice: the token "does not convey any rights, obligations, or benefits of the security." It is a transfer instruction. Moving the token notifies the issuer or its agent to record a transfer on the master securityholder file, which remains the offchain record. The holder is still on the register, but the token itself is not the thing owned.

Third-party custodial

An unaffiliated third party holds the underlying security in custody and issues a token representing a security entitlement. The token evidences the holder's ownership interest, direct or indirect, in the security held in custody. The staff notes that the model marketed as a "digital custodial receipt" is not distinct from this one. The holder has an interest, intermediated by the third party's records rather than the issuer's.

Third-party synthetic

The third party issues its own security giving exposure to a referenced security. This takes two forms, a linked security or a security-based swap, and both are candid about what they are not. A linked security is a security of the third party that provides synthetic exposure, and it is "not an obligation of the issuer of the referenced security and confers no rights or benefits from the issuer of the referenced security." A security-based swap "typically does not convey to the holder any equity, voting, information, or other rights with respect to the referenced security."

Four structures. Two put the holder on the issuer's record. One gives an intermediated interest in a custodied security. One gives exposure to a price and nothing else.

The single most useful sentence in the document sits in the third-party section. The staff writes that for these structures the token "may or may not represent an ownership interest in or contractual obligation of the issuer of the underlying security and, as such, may or may not confer upon the holder of the crypto asset any rights as a holder of the underlying security."

A regulator does not write "may or may not" twice in one sentence by accident. It is telling the market that two instruments can carry the same description and confer entirely different things.

What the Taxonomy Did Not Settle

A map that sorts instruments by where the record sits invites an obvious question: who is entitled to create the record in the first place. That question is live at the Commission and it is contested by the people closest to the plumbing.

On 13 July 2026 the Securities Transfer Association, the trade body for the firms that maintain shareholder records, wrote to the SEC arguing that tokenized products should be authorized by the underlying issuer and reflected in that issuer's official shareholder records, and that company-authorized tokenization should receive preferential treatment under any future rules. The association's position, reduced to its core, is that a token created by an unaffiliated platform is not the share.

The opposing case sits on the Commission's own website. A submission to the SEC's Crypto Task Force dated 1 April 2026 is titled, without ambiguity, "Why Third-Party Tokenization of Publicly Traded Securities Should Not Require Issuer Approval." A further industry submission followed on 13 April. The argument advanced in these filings is that conditioning third-party tokenization on issuer consent would hand issuers a veto over secondary-market activity that securities law has long declined to give them.

We take no position here on which side should prevail. The point for a holder is narrower and more immediate: the question of whether an issuer must consent is unresolved at the regulator, and the answer determines what a large class of existing instruments actually is.

There is a detail in the staff statement that makes this sharper than it first appears. In setting out its assumptions, the staff writes that it assumes the tokenized securities under discussion are "not subject to any restriction on transfer imposed by the issuer" and are properly issued and transferred under applicable state law, pointing to Article 8 of the Uniform Commercial Code. The taxonomy, in other words, assumes away precisely the condition that is being fought over. That is a reasonable way to write a descriptive map. It is not a basis for concluding that the market has settled.

Meanwhile the governance layer has moved ahead of the rulemaking. On 5 May 2026 Broadridge extended its proxy voting and disclosure infrastructure to third party-custodied tokenized securities, covering governance across the models the SEC outlined, and framed the reason plainly: solving for governance, irrespective of how instruments are tokenized and where they are held, is critical to scaling adoption. The same announcement describes issuers managing proxy and corporate actions across registered, beneficial and tokenized shares. The infrastructure to pass a vote through an intermediated structure now exists. Whether a given instrument uses it is a fact about that instrument, not about the technology.

A Live Example, and What It Shows

The gap between structures is easiest to see in a real product.

On 11 August 2026 Abu Dhabi Global Market announced that its Financial Services Regulatory Authority had granted a Financial Services Permission covering arranging deals in investments and providing custody, to facilitate tokenized securities. ADGM states that tokenized securities registered and issued there are fully backed by the underlying shares under FSRA supervision. The regulator approved a prospectus for the first product on 4 August 2026.

The structure underneath is where the detail lives, and it is instructive. As reported, the issuer is a special purpose vehicle established in June 2026, not the company whose stock is referenced. What the holder acquires is a beneficial interest in a certificate over those shares. On the prospectus terms as reported, voting runs to vested holders as the prospectus defines them and is subject to restrictions, dividends are automatically reinvested rather than paid out, and converting the position back into the underlying shares or their cash equivalent requires a qualifying brokerage or bank account even though acquiring it does not.

We have not read the prospectus, and we are careful to say so. Without it we cannot place this product definitively within the staff taxonomy, and neither can anyone working from the announcement alone. That is the practical lesson rather than a caveat on it. A structure that is fully backed under regulatory supervision, that conveys a beneficial interest, that restricts voting by class of holder and that reinvests rather than distributes income is not adequately described by the phrase "tokenized equity." The description that matters is in a document most holders will never open.

Note also what the access story conceals. A position that can be acquired with a wallet and unwound only through a qualifying brokerage or bank account has not removed the intermediary. It has moved the requirement from acquisition to redemption.

What an Investment Committee Should Ask

The diligence question is not whether the mandate permits tokenized instruments. It is which structure this specific instrument is, and the answer is not in the marketing.

1. Which of the four structures is this, and what is the evidence? The answer is in the offering document, not the announcement. If the promoter cannot say whether the holder appears on the issuer's master securityholder file, that is itself the answer.

2. Who maintains the record of our ownership? The issuer or its agent, a third party's entitlement records, or the third party's own balance sheet. These are three different credit positions wearing one label.

3. Does the issuer know we exist? In two structures the issuer's record shows the holder. In the other two it does not, and corporate actions reach the holder only if an intermediary passes them through.

4. What happens to the vote and the dividend, specifically? Not whether rights exist in principle, but whether they run to this class of holder, on what conditions, and whether income is distributed or reinvested. The infrastructure to pass votes through now exists. Its use is a choice made in the documents.

5. What is the exit, and what does it require? Acquisition terms and redemption terms are set independently. Access is a distribution feature. Redemption is a liquidity term, and it is the one that binds when a position needs to be unwound.

6. Whose failure would impair this position? For third-party structures the staff statement is explicit that holders may face third-party risks, bankruptcy among them, to which a holder of the underlying security would not necessarily be exposed. Concentration limits set at the issuer level do not capture an exposure that sits at the platform.

The through-line is that tokenization has not changed what a share is. It has multiplied the number of ways to hold something adjacent to one, and the differences between those ways are legal and structural rather than technological. An institution that can name which structure it holds, and who maintains the record, is asking the question the regulator's own taxonomy is organized around.

The question is not whether you own a tokenized share. It is who keeps the register, and whether you are on it.

Sources

All primary documents accessed 18 August 2026. Quotations are verbatim from the sources named.

• U.S. Securities and Exchange Commission, Divisions of Corporation Finance, Investment Management and Trading and Markets, Statement on Tokenized Securities, 28 January 2026. A staff statement, with no legal force or effect. Source of the taxonomy and of every quotation describing the four structures.
• Securities Transfer Association, submission to the SEC, 13 July 2026, as reported by CoinDesk. The letter itself is not published on the Commission's public docket; the position is reported, not quoted here.
• Written submission to the SEC Crypto Task Force, "Why Third-Party Tokenization of Publicly Traded Securities Should Not Require Issuer Approval", 1 April 2026. Cited for its stated position; the underlying filing was not read for this article, and no specific statutory argument is attributed to it.
• Broadridge, extension of proxy voting and disclosure solutions to tokenized securities, 5 May 2026.
• Abu Dhabi Global Market, Financial Services Permission announcement, 11 August 2026. Prospectus terms described in this article are as reported by secondary coverage; the prospectus was not read.