SEC Proposes Blockchain-Based Stock Record System Amid Regulator Fines
The US Securities and Exchange Commission (SEC) has proposed new rules for transfer agents, which could lead to stock records being stored on-chain. This change would make a blockchain the official record of who owns shares in public companies.
Transfer agents currently keep master securityholder files, which are the issuers' legal lists of shareholders, and route dividends and process transfers. However, these rules have not been updated since the 1980s.
The proposed new rules would amend existing rules, forms, and add several new ones, including the use of blockchain technology in connection with securities offerings and share transfers. This change is seen as a way to modernize and streamline the process, according to Chairman Paul Atkins.
A related case has also been settled by the Commodity Futures Trading Commission (CFTC), which fined a swaps trader $90,000 for deleting messages that regulators ordered him to keep. The CFTC said this attempt to impede their investigation goes against the law and hinders their ability to detect wrongdoing.
The SEC's proposal has been in the works for over a decade, with Commissioner Hester Peirce saying it took more than 10 years to get to this point. The change is being tied to the use of technology already used by transfer agents, including blockchain.