Tokenised stocks need real investor safeguards models gaps and the path forward (October 2025)

Tokenised stocks investor safeguards must match the speed and access promised by tokenisation. Regulators around the world are sharpening their warnings on tokenised stocks and synthetic equity exposure. This article sets a practical blueprint for investor safeguards that cover custody clarity, redemption, corporate actions and disclosures, and explains where the biggest gaps remain today.

What tokenised stocks are in practice

Tokenised stocks seek to give investors equity like exposure using a token that represents economic rights to a share or to a synthetic instrument that tracks its value. Designs vary a lot, from exchange issued synthetics to claims fully backed by underlying shares held with a licensed custodian.

Governance and custody blueprint

• Asset representation. Prefer a structure where each token maps to a specific claim against an identified pool of real shares under a clear trust or custody agreement.
• Chain of title. Document how legal ownership flows from issuer to custodian to token holder. Publish the reconciliation workflow and audit cadence.
• Segregation and insolvency. Underwrite segregation of client assets and explain how token holders rank in insolvency. State the law and the court that governs disputes.
• Oracles and pricing. Use primary market references with observable inputs and clear fallbacks. Ban self referenced feeds.
• Redemption and corporate actions. Spell out cash and in kind redemption rules, voting instructions, dividends, splits and rights issues.
• Disclosure and attestations. Provide short form monthly attestations on backing and a quarterly controls report by an independent auditor.

Threat model snapshot

Actors. Issuer, custodian, market maker, oracle provider, exchange venue, on chain bridge.
Risks. Misrepresentation of backing, failure to settle redemptions, oracle manipulation, custody rehypothecation, regulatory breach across borders, bridge compromise.
Controls. Daily position reconciliation, oracle diversity with circuit breakers, fully segregated custody, public proof of reserves with independent attestation, strict KYC for primary issuance, audit trails for corporate actions.

Design spectrum without a table

Synthetic exposure
Exposure through derivatives or internal market making with no right to a specific share. High counterparty risk and limited rights.

Fully collateralised claim
Token maps to a claim on shares held by a licensed custodian. Redemption and corporate actions flow by contract. Medium counterparty risk.

Wrapped security
A security exists off chain and is wrapped into a token through a registrar or a central securities depository partner. Stronger corporate rights and clearer disclosures.

Native on chain security under a sandbox regime
Issued directly on chain within a pilot regime. Corporate registry links, cap table, and corporate actions live on chain. Highest clarity on rights when law recognises the ledger.