SEC Proposes First Transfer Agent Overhaul in 40 Years, Citing Tokenization

In brief

• The SEC on Tuesday proposed the first substantive update to its transfer agent rules since the early 1980s, opening a 60-day comment period.
• New reporting questions would require agents to disclose issues recorded on distributed ledgers and to break out tokenized issues by model.
• Commissioner Hester Peirce said the proposal was more than a decade in the making and invited comment on its implications for tokenization.

The Securities and Exchange Commission has proposed the first substantive rewrite of its transfer agent rules since the early 1980s, in a 421-page release published Tuesday that repeatedly addresses blockchain recordkeeping and tokenized securities.

Transfer agents maintain the official record of who owns an issuer's securities, handling issuance, cancellation and transfer. The Commission adopted most of the current rules in the late 1970s and early 1980s.

The release says market participants are actively seeking to bring blockchain-native, or "onchain," transfer agents into the U.S. market, with firms building models for blockchain-based recordkeeping, tokenized fund administration and cross-chain interoperability that would require agents to keep securityholder records on distributed ledgers and run smart-contract-driven processes.