SEC Proposes Blockchain-Friendly Transfer Agent Rules Update

The US Securities and Exchange Commission (SEC) has proposed an update to its decades-old transfer agent rules, which will now include blockchain-based recordkeeping and tokenized securities.

The current framework, which hasn't been substantively updated since the late 1970s and early 1980s, doesn't adequately address the emerging risks of digital market infrastructure. The SEC is seeking public comment on the proposed changes, with comments due 60 days after the proposal is published in the Federal Register.

Market participants are actively seeking to bring blockchain-native transfer agents into the US market, and the SEC's existing framework doesn't address the risks of cybersecurity, operational resilience, and safeguarding securities and investor records. The proposed rules would update requirements covering registration, recordkeeping, safeguarding, and securities transfers.