SEC Proposes Overhaul of Transfer Agent Rules Amid Tokenization Surge

The US Securities and Exchange Commission (SEC) has proposed its first significant update to transfer agent rules in over 40 years, citing tokenization as a key driver. The proposal, which is open for comment until November 12, aims to bring the current rules into line with modern technology.

Transfer agents maintain the official record of who owns an issuer's securities and handle issuance, cancellation, and transfer. The current rules were adopted in the late 1970s and early 1980s, but market participants are now seeking to bring blockchain-native transfer agents into the US market.

The proposed updates would require agents to disclose issues recorded on distributed ledgers and to break out tokenized issues by model. Commissioner Hester Peirce said the proposal was more than a decade in the making and invited comment on its implications for tokenization.