SEC Proposes Blockchain and Tokenization Rules for Transfer Agents

The SEC proposed overhauling transfer agent rules unchanged since the ‘70s, adding standards for blockchain recordkeeping, tokenized securities, AI, and cybersecurity risks.

Crypto Regulation & Tokenization News

The US Securities and Exchange Commission (SEC) has proposed a sweeping update to its transfer agent rules, which have not seen any meaningful changes since the late 1970s.

The

, announced Sept. 1, addresses blockchain-based recordkeeping, tokenized securities, and the growing role of automation and artificial intelligence in securities markets.

Transfer agents serve as recordkeepers for securities. They maintain ownership records and handle corporate actions such as mergers and dividend distributions. They also play a central role in the clearing and settlement process. The

said its existing framework was built around paper certificates and manual recordkeeping and no longer reflects how the industry operates.

Modernizing Decades-Old Market Infrastructure

SEC Chair Paul Atkins said the proposal would bring the agency's rules in line with current practice. "This proposal would streamline and modernize the Commission's rules to reflect transfer agents' current processes and operations, including the use of electronic communications and blockchain technology in connection with securities offerings and the transfer of shares," Atkins said. The agency said market participants are actively seeking to bring blockchain-native transfer agents into the US market, covering models for tokenized fund administration and cross-chain interoperability.