SEC proposes overhaul of transfer agent rules for blockchain

The SEC proposes major transfer agent rule updates, recognizing blockchain for securities recordkeeping and modernizing standards for digital assets and cybersecurity.

The U.S. Securities and Exchange Commission (SEC) has proposed a sweeping update to its decades-old rules for transfer agents. This initiative aims to modernize regulations in response to advancements in blockchain technology, tokenized securities, and automated systems. The proposal recognizes blockchain as a primary record-keeping system for securities. It introduces new requirements for digital records, cybersecurity, and business continuity, while updating standards for registration, recordkeeping, transfer processing, and asset safeguarding. Additional changes address restrictive legends, paying-agent services, and oversight of third-party technology providers. This marks the first major revision since the late 1970s and early 1980s, reflecting the SEC’s intent to align regulatory frameworks with today’s technological realities. Public comments will be accepted for 60 days after publication in the Federal Register.