SEC Proposes Blockchain-Friendly Update to Transfer Agent Rules
The US Securities and Exchange Commission (SEC) has proposed an overhaul of its transfer agent rules to keep up with the increasing use of blockchain technology in the financial industry.
The current rules, which have not been updated since the late 1970s and early 1980s, do not adequately address the risks associated with cybersecurity, operational resilience, and the safeguarding of securities and investor records in digital market infrastructure.
The SEC's proposal would update requirements covering registration, recordkeeping, safeguarding, and securities transfers, as well as introduce new rules aimed at addressing emerging risks.
Marcus & Schwartz law firm notes that the existing framework does not account for blockchain-native transfer agents, which are being brought to the US market. The SEC is seeking public comment on the proposed changes, with comments due 60 days after publication in the Federal Register.