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SEC proposes update to transfer agent rules, citing blockchain and tokenization
The SEC says transfer agent rules have not been substantively updated since the late 1970s and early 1980s, and it is asking for public comment due 60 days after publication in the Federal Register.
The US Securities and Exchange Commission has proposed overhauling decades-old rules that govern transfer agents, as blockchain-based recordkeeping and tokenized securities gain traction in US markets, Cointelegraph reports.
The proposal would update requirements related to registration, recordkeeping, safeguarding, and securities transfers, and introduce new rules aimed at risks the SEC says are growing with more digital and automated market infrastructure.
The SEC said its existing framework does not adequately address developments such as cybersecurity and operational resilience, including how securities and investor records are safeguarded.
Under the plan, transfer agents would face expanded reporting obligations and new compliance standards, including rules covering restrictive legends and the use of third-party service providers, and the SEC is seeking public comment with responses due 60 days after the proposal is published in the Federal Register.