SEC Proposes Blockchain-Ready Update to Decades-Old Transfer Agent Rules

The U.S. Securities and Exchange Commission (SEC) has proposed an overhaul of rules for registered transfer agents to account for electronic communications and blockchain technology in securities offerings and share transfers.

The proposal would be the agency's first substantive update to the framework since the rules were adopted in the late 1970s and early 1980s. This update recognizes electronic and blockchain-based recordkeeping, as well as uncertificated securities, bringing those methods into the transfer-agent framework.

The proposed changes also add requirements on turnaround times, risk management, inactive securityholders, compliance, and restrictive legends. These elements indicate that the SEC's initiative extends beyond recognizing new recordkeeping technology.