Staff split the market into issuer-sponsored models and third-party models. An issuer can put the official ownership record, the master securityholder file, onchain, so that a token transfer is a share transfer. An issuer can also keep the master file offchain and use a token only as a notice to update that file. A third party can hold the underlying security in custody and issue a tokenized security entitlement. Or a third party can issue its own linked security or security-based swap that "provides synthetic exposure to a referenced security, but 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." Those products can look identical in a wallet. Transfer, voting, dividend, disclosure, and recovery rights follow the legal instrument and the master record, not the visual ticker. The Commission's April plain-language guide says the same thing at retail altitude. "The rights of a holder of the crypto asset may be materially different from the rights of a holder of the underlying security, including economic and voting rights." Faster settlement does not cure a weak claim. A token that tracks a listed company is not that company's stock unless the legal wrapper says it is. Holders can face the underlying issuer's risk plus a tokenizer's custody, operational, and bankruptcy risk. Staff put that in the third-party section without drama: holders "may be exposed to risks with respect to the third party, such as bankruptcy, to which a holder of the underlying security would not necessarily be exposed." A synthetic instrument may offer no shareholder claim at all. Brokers, custodians, and transfer agents bear reconciliation and compliance duties when onchain and offchain records interact. Protocol record, operator custody, user screen, and legal wrapper are four objects. The useful profile names the legal issuer, the master record, the custodian, the backing ratio, the redemption route, voting and distribution rights, the trading venue, and insolvency treatment. The Bank for International Settlements, in its 2026 Annual Economic Report, treats trusted financial claims as an institutional problem, not a token-count problem. Interoperability and settlement design only matter if the claim is real. Market-wide standards for disclosures, audits, recovery, and trading surveillance are still developing. Cross-border products may expose users to rights that are hard to enforce at home. Regulators still have to say how existing custody, transfer-agent, exchange, and securities rules apply to each architecture. A useful update is not a new ticker. It is enforceable terms, an independent audit, a proven redemption, or a binding regulatory decision. Staff views are maps. They are not the stock.
