SEC Proposes Transfer Agent Rules for Blockchain-Based Share Records

The proposal would update electronic recordkeeping rules and add risk-management and compliance requirements for registered transfer agents using blockchain systems.

The U.S. Securities and Exchange Commission proposed an overhaul of its transfer agent rules on Sept. 1 that would account for electronic and blockchain-based share records while adding updated record-retention, risk-management and compliance requirements.

The direct obligations would fall on registered transfer agents, including tokenization firms or issuers that hold that status. For blockchain-based registries, the proposal’s practical effect would be to place their recordkeeping systems inside a modernized, technology-aware rule framework rather than rules largely written when investors commonly held paper certificates.

The SEC’s fact sheet says 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.

Amendments to Rules 17ad-1 and 17ad-9 would update terminology to reflect contemporary electronic recordkeeping and communications technology. Across the proposal, the SEC also identifies blockchain-based recordkeeping and uncertificated securities as technologies the modernized rules would address.