SEC Proposes Transfer Agent Rules for Blockchain-Based Share Records
The US Securities and Exchange Commission (SEC) has proposed an overhaul of its transfer agent rules to account for electronic and blockchain-based share records. The proposal aims to update record-retention, risk-management, and compliance requirements for registered transfer agents using blockchain systems.
The SEC's fact sheet states that the proposed amendments to Rules 17ad-6 and 17ad-7 would establish a single retention period for most transfer agent records and modernize provisions governing electronic systems and third-party recordkeepers. The proposal also updates terminology to reflect contemporary electronic recordkeeping and communications technology.
The rewritten Rule 17ad-12 would require transfer agents to maintain written policies designed to safeguard securities and funds, as well as identify, measure, monitor, and mitigate material risks arising from their operations. Transfer agents would also need a business continuity plan and a separate bank account for issuer, securityholder, and third-party funds.
The proposal follows a nonbinding May 2025 staff FAQ that said a registered transfer agent could use distributed ledger technology as all or part of its official master securityholder file if it complied with existing federal securities requirements. The SEC's voting record lists Chair Paul Atkins, Commissioner Hester Peirce, and Commissioner Mark Uyeda as approving the proposal.