SEC Proposes Overhaul of Transfer Agent Rules, Naming Blockchain Directly
The SEC has proposed updates to transfer agent regulations, marking the first major overhaul since the 1980s. The new rules aim to modernize recordkeeping by explicitly incorporating blockchain technology and electronic communication standards.
Why it matters
This represents a significant step in integrating blockchain into traditional financial infrastructure, potentially increasing the legitimacy and adoption of distributed ledger technology in securities management.
The Securities and Exchange Commission (SEC) proposed Tuesday to update the rules governing registered transfer agents for the first time since most of them were adopted in the late 1970s and early 1980s, explicitly naming blockchain technology as one of the tools the modernized framework is meant to accommodate.
Transfer agents maintain the official record of who owns a company's securities and process the transfer, issuance and cancellation of both paper and electronic shares. The SEC said in its announcement that the rules have not kept pace with how transfer agents actually operate today.
"This proposal would streamline and modernize the Commission's rules to reflect transfer agents' current processes and operations, including the use of electronic communications and blockchain technology in connection with securities offerings and the transfer of shares," said SEC Chairman Paul Atkins.
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