SEC Transfer Agent Rule Update Addresses Blockchain and AI
Proposal modernizes 1970s transfer-agent requirements for electronic recordkeeping, distributed ledgers, smart contracts and AI oversight.
What is new
SEC Chair Paul Atkins stated that the proposed changes reflect current electronic and blockchain operations.
Commissioner Hester Peirce supported the proposal.
The agency opened a 60-day public comment period.
The Securities and Exchange Commission has proposed revisions to rules that govern transfer agents, the entities responsible for maintaining official records of securities ownership and processing changes in those records.
The update targets requirements written largely in the 1970s and seeks to accommodate electronic recordkeeping, blockchain-based systems, smart contracts and AI-driven processes.
Core responsibilities unchanged
Firms that adopt blockchain for ownership records must still manage data integrity, security and operational risks.
Smart-contract automation does not remove regulatory obligations; transfer agents remain responsible for accurate records and transaction integrity regardless of the technology used.
Transfer agents using AI must maintain appropriate oversight and accurately describe the capabilities of automated systems rather than relying on technology without sufficient human supervision.
Firms already registered
Registered transfer agents already operating in digital securities include Injective Institutional Services, Securitize and tZERO.
Open details
The full text of the proposal has not been released.
No date or format has been specified for any separate review of 24/7 trading.