ATS Secondary Markets for Tokenized Securities — Platform Analysis and Liquidity Assessment
Published February 16, 2026 · SEC Tokenization Research
ATS Regulatory Framework
Secondary trading of tokenized securities in the US operates through registered Alternative Trading Systems (ATS) under SEC Regulation ATS and FINRA oversight. ATS operators must register as broker-dealers and file Form ATS-N with the SEC, disclosing trading protocols, conflicts of interest, and operational procedures. For tokenized securities, ATS platforms must additionally address: blockchain-based order matching and settlement, smart contract-enforced transfer restrictions (for Reg D securities), KYC/AML verification integrated with on-chain transfer protocols, and compliance with applicable Fair Access requirements. The ATS framework provides regulatory legitimacy while enabling innovation in trading protocols that traditional exchange structures may not accommodate.
Platform Landscape — tZERO, Securitize Markets, INX
tZERO ATS (owned by Overstock's Medici Ventures) was among the first SEC-registered platforms for tokenized securities trading and has listed several Reg D token offerings. Securitize Markets operates as the ATS arm of Securitize's integrated tokenization platform — enabling primary issuance, transfer agent services, and secondary trading within a single regulated ecosystem. INX operates as both a registered ATS for security tokens and a registered exchange for digital assets. Each platform provides different advantages: tZERO offers established trading history, Securitize provides end-to-end integration, and INX offers dual regulatory registration spanning securities and digital assets.
Liquidity Challenges and Institutional Solutions
The primary challenge facing tokenized securities secondary markets is liquidity depth. Unlike listed securities on national exchanges with continuous two-sided markets maintained by registered market makers, tokenized securities on ATS platforms often feature wide bid-ask spreads, thin order books, and limited trading frequency. Institutional solutions being developed include: dedicated market makers for tokenized securities (Wintermute, GSR), cross-ATS aggregation protocols that pool liquidity across multiple platforms, integration with DeFi liquidity protocols under regulated frameworks, and the eventual migration of tokenized securities to national exchanges (pending Nasdaq and NYSE filings).
Institutional Trading Considerations
For institutional investors evaluating tokenized securities positions, secondary market considerations include: average daily volume and bid-ask spread metrics for position sizing, transfer restriction compliance for Reg D securities (typically 12-month holding periods under Rule 144), ATS platform counterparty and operational risk assessment, settlement finality and timing for risk management, and broker-dealer obligations when facilitating customer trades on ATS platforms. The evolution from ATS-based trading to exchange-listed tokenized securities will dramatically improve institutional trading economics — but the transition timeline depends on SEC approval of pending exchange filings.
2026-2028 Institutional Outlook
The trajectory for ats secondary markets for tokenized securities within US capital markets points toward significant institutional expansion through 2026-2028. The convergence of regulatory clarity (SEC January 2026 taxonomy), infrastructure development (DTCC tokenization services launching H2 2026), and settlement innovation (GENIUS Act stablecoin framework) creates the institutional foundation for meaningful market scaling. Tokenized US Treasuries alone are projected to reach $20-30 billion by end of 2026, with the broader tokenized securities market potentially reaching $500 billion by 2030 according to institutional projections from McKinsey and BCG. The participation of BlackRock, DTCC, Nasdaq, JP Morgan, Goldman Sachs, and Franklin Templeton — representing trillions in institutional infrastructure — confirms that securities tokenization has entered the institutional mainstream. Market participants should prepare for tokenized securities to become a standard feature of US capital markets by end of decade.
Institutional Due Diligence Framework
Before engaging with tokenized instruments in this category, institutional participants should verify: SEC registration or exemption qualification for any tokenized security (check EDGAR filings), broker-dealer registration and FINRA membership of facilitating intermediaries, transfer agent registration for entities maintaining on-chain ownership records, smart contract audit history from recognized security firms (CertiK, Trail of Bits, OpenZeppelin), custody architecture including key management procedures and SIPC coverage applicability, secondary market liquidity metrics including average daily volume and bid-ask spreads on registered ATS platforms, AML/KYC compliance program adequacy under Bank Secrecy Act requirements, and tax reporting infrastructure for accurate Form 1099-B and cost basis tracking. This due diligence framework ensures tokenized securities allocation decisions meet the same institutional standards applied to traditional securities investments.
Key Market Data Points
Essential metrics for institutional evaluation: the tokenized US Treasury market exceeded $8.7 billion in early 2026 with BlackRock BUIDL leading at $1.87 billion AUM, DTCC processes over $300 trillion in annual transactions and plans tokenization services launch in H2 2026, Nasdaq has filed with the SEC to trade tokenized securities on national exchanges, the GENIUS Act establishes regulated stablecoin settlement infrastructure with $250+ billion in stablecoin market capitalization, over 86% of institutional investors surveyed by S&P Global reported digital asset exposure or active allocation intent, and the global tokenized RWA market is projected to reach $18.9 trillion by 2033 according to Ripple and BCG research. These data points establish the institutional credibility of tokenized securities as an emerging infrastructure upgrade for the world's largest capital market rather than a speculative experiment.
The evolution of ATS platforms for tokenized securities represents a critical bridge between the current fragmented secondary market and the anticipated future of exchange-traded tokenized securities. Institutional liquidity providers are beginning to commit capital to tokenized securities market-making, and cross-platform aggregation is emerging as a solution to the liquidity fragmentation inherent in a multi-ATS landscape. The transition to exchange-listed tokenized securities will dramatically improve execution quality, but ATS platforms will retain relevance for private securities, alternative assets, and instruments that do not qualify for exchange listing.
Institutional investors should monitor ATS platform development alongside exchange filing progress to identify optimal entry points for tokenized securities allocation.