SEC Proposes Transfer Agent Rule Overhaul for Blockchain and Tokenized Securities

The US Securities and Exchange Commission (SEC) has proposed an overhaul of transfer agent rules to accommodate blockchain and tokenized securities.

The proposal aims to update registration, recordkeeping, transfer processing, and asset safeguarding requirements for transfer agents using electronic recordkeeping systems.

The existing framework dates back to the late 1970s and early 1980s, when investors held paper certificates and firms processed ownership changes manually.

The SEC said its proposed amendments to Rule 17ad-7 would require controls protecting records against unauthorized alteration, deletion, or destruction, and an audit trail identifying who accessed, changed, or deleted a record.