SEC Proposes Blockchain Updates to Transfer Agent Rules
SEC Chairman Paul Atkins outlined targeted amendments to existing transfer-agent rules that explicitly accommodate blockchain recordkeeping without creating a new regulatory category.
What is new
SEC Chairman Paul Atkins stated the proposal streamlines rules to reflect current use of electronic communications and blockchain technology.
The Securities and Exchange Commission noted that market participants are actively seeking to bring blockchain-native transfer agents into the U.S. market, including systems for tokenized fund administration and cross-chain interoperability.
The Securities and Exchange Commission issued a proposal that would allow registered transfer agents to use distributed ledger technology as the authoritative master securityholder file for securities ownership.
The change would modernize rules that have seen few substantive updates since the late 1970s and early 1980s, while keeping oversight of recordkeeping and transfers with the existing transfer-agent regime.
Rule amendments
Proposed Rule 17ad-30 requires written compliance policies; Rule 17ad-31 sets requirements for restrictive legends and unregistered transaction checks.
Rule 17ad-12 is reframed as a broader risk-management rule requiring separate client-fund accounts and business continuity plans.
The proposal rescinds Rule 17ad-4 exemptions as technologically obsolete.
Effective registration period is extended from 30 to 45 days and the business-expansion threshold is raised from 75 percent to 95 percent.
Reporting and comment process
Under the proposal, transfer agents would have to report the number of tokenized securities they service and identify the blockchain platforms supporting those records.
The plan was published on the SEC website and will appear in the Federal Register, after which a 60-day public comment period will open.
Open items
Exact implementation details and final rule text remain subject to comment period.
No specific timelines or affected issuers disclosed.