SEC Proposes Blockchain Integration into Official Stock Ownership Records

The Securities and Exchange Commission (SEC) has proposed updating the rules for registered transfer agents to reflect electronic communications and blockchain technology in securities offerings and share transfers. The proposal, published on September 1, aims to modernize the transfer agent rules that date back to the late 1970s and early 1980s.

The SEC is asking how blockchains can be used in official recordkeeping, rather than treating them as a separate entity outside the securities system. This shift is significant, as it acknowledges the potential for distributed ledgers to play a role in maintaining accurate ownership records.

However, not everyone is pleased with the proposal. Commissioner Mark Uyeda criticized the lack of rulemaking in this area over the past decade and expressed concerns about a regulation-by-enforcement approach that has left transfer agents and investors without clarity.