The SEC proposed its first broad overhaul of transfer agent rules since the late 1970s and early 1980s, adding provisions for blockchain-based recordkeeping and tokenized securities. The proposal also expands cybersecurity, compliance, and reporting requirements, with public comments due 60 days after publication in the Federal Register.
Old rules meet blockchain infrastructure
The SEC proposed changes to its transfer agent rules on Tuesday, which the agency says have not been significantly updated since the rules were proposed in the late 1970s. Transfer agents record securities ownership, handle corporate actions such as mergers and dividend distributions, and play a role in clearing and settlement, according to The Block.
SEC Chair Paul Atkins said the proposal would streamline and modernize the commission's rules to reflect transfer agents' current processes, including electronic communications and blockchain technology used in securities offerings and share transfers. The rule change runs to 421 pages and would update requirements covering registration, recordkeeping, safeguarding, and securities transfers, while adding new rules for the use of third-party service providers.
Tokenization push already underway
Some market participants are already seeking to bring blockchain-native transfer agents into the US market, the SEC said. Injective recently became an SEC-registered transfer agent, joining Securitize and tZERO, which are also registered transfer agents.
SEC Commissioner Hester Peirce, who is leaving the agency in the coming weeks, said she was pleased to support the rule change before her departure.
Part of a broader deregulatory push
The proposal follows a series of SEC moves to simplify securities rules. In May, the agency proposed three changes to public-company rules, including an option for semiannual reporting and a simplified filer classification system. Last week, it also sent a proposed overhaul of crypto custody rules for investment advisers to the White House for review.
Sources: Cointelegraph, The Block
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