Securitize said on May 4, 2026 that the Financial Industry Regulatory Authority (FINRA) has cleared its broker-dealer to expand its permitted activities, including custody of tokenized securities. The update was shared by Cointelegraph citing the company's announcement.
The expansion lets Securitize hold tokenized fund interests, equities, and other digital securities for institutional clients under the same broker-dealer entity that already handles their issuance and transfer. Until now, custody of tokenized securities in the US has typically been split across separate qualified custodians, fund administrators, and transfer agents, which adds reconciliation work and slows settlement.
What the approval actually changes
The approval is a Continuing Membership Application (CMA) update, the standard FINRA process a broker-dealer files when it wants to add or modify its permitted lines of business. In Securitize's case, the change covers custody of digital asset securities, an activity FINRA has historically reviewed case by case rather than via blanket guidance.
For Securitize, that means three things. The firm can now hold tokenized fund tokens directly for institutional accounts, settle transactions inside its own books rather than routing through a separate qualified custodian, and offer fund managers a single counterparty across issuance, transfer, and custody.
It does not change the underlying SEC regime. Tokenized securities still have to comply with Regulation D, Regulation S, or whichever exemption the issuer used. The approval addresses the broker-dealer side of the stack, not the issuer side.
Why this matters for tokenized funds
Securitize is the transfer agent and tokenization platform behind several of the largest tokenized funds in the market, including BlackRock's BUIDL fund and Apollo's tokenized credit fund. Those products have grown to multi-billion-dollar AUM but still rely on a patchwork of custodians and intermediaries on the back end.
Bringing custody in-house at the broker-dealer level cuts a layer of friction for institutional buyers, who often cite custody arrangements as a gating issue when allocating to tokenized products. It also positions Securitize closer to the model the DTCC is pursuing for its own tokenized securities platform, which targets a July pilot and October launch.
The competitive backdrop matters too. BlackRock has been pushing the OCC to scrap the 20% cap on tokenized reserve assets for trust banks, and several large issuers have publicly said the bottleneck for tokenized money market funds is custody and settlement plumbing rather than demand.
Where it sits in the broader stack
US tokenized securities currently route through a mix of:
- A registered transfer agent that maintains the cap table on chain
- A qualified custodian (often a trust company) holding the tokens
- A broker-dealer for primary distribution and secondary trading
- A fund administrator handling NAV and investor reporting
Securitize already operates the transfer agent, broker-dealer, and tokenization platform pieces. Adding custody at the broker-dealer level lets it consolidate three of those four functions inside one entity for institutional clients that want it.
That is closer to how Wall Street prime brokers structure traditional securities custody, and it is a model regulators have been pushing tokenization platforms toward as the asset class moves from pilots to production. It also reduces counterparty exposure for fund issuers, who would otherwise rely on a separate trust company they do not control.
What is still unresolved
The approval does not address several open questions for tokenized securities in the US. There is still no SEC rule on whether tokenized fund interests qualify as digital asset securities for purposes of the SEC's Special Purpose Broker-Dealer framework, which has only attracted a handful of registrants since it was introduced in 2020.
Secondary trading remains thin. Most tokenized fund volume today is primary issuance and redemption, not on-chain peer-to-peer transfers, and FINRA's approval does not change the alternative trading system rules that would govern a tokenized securities exchange.
Bank custody is the other open lane. The OCC's interpretive letters allow national banks to custody crypto assets, but the rulebook for tokenized securities specifically is still being written, and most large banks have stayed on the sidelines while waiting for clearer guidance.
Overview
Securitize received FINRA approval on May 4, 2026 to expand its broker-dealer activities, including custody of tokenized securities. The change lets the firm consolidate issuance, transfer, and custody for tokenized funds inside a single regulated entity, reducing intermediary layers for institutional clients. It is a back-end plumbing approval rather than a market-moving event, but it removes one of the recurring friction points cited by issuers of tokenized money market and credit funds.
