SEC Unveils First Comprehensive Update to Transfer Agent Rules in Over Four Decades

The US Securities and Exchange Commission (SEC) has proposed its first comprehensive update to transfer agent regulations in over four decades, aiming to incorporate blockchain recordkeeping and tokenization.

The current rules date back to the late 1970s and early 1980s, but with the increasing use of distributed ledger technology, the SEC wants to modernize the process. Transfer agents will be required to report on issues tracked on blockchains and break out tokenized securities by their operational model.

The proposal also raises questions about handling records held solely on blockchains that the agent does not fully control, as well as linking wallet addresses and asset holdings to offchain records containing holders' names and addresses.

SEC Commissioner Hester Peirce emphasized that the proposal is the result of over a decade's work and welcomed industry feedback. The Commission has opened a 60-day public comment period on the transfer agent proposal, which will close two months after its publication in the Federal Register.