Crypto
Home›Crypto›Regulation›SEC proposes new transfer-agent rules for blockchain-b…
SEC proposes new transfer-agent rules for blockchain-based share records
The proposal would require registered transfer agents to adopt risk-management policies, business continuity plans, and security-focused compliance procedures tailored to distributed-ledger systems.
The U.S. Securities and Exchange Commission proposed an overhaul of its transfer agent rules on Sept. 1 to explicitly cover electronic and blockchain-based share records, while updating record retention, risk-management and compliance requirements.
The SEC said the direct obligations would apply to registered transfer agents, including tokenization firms or issuers that hold that status. For blockchain-based registries, the practical effect would be to bring their recordkeeping systems under a modernized, technology-aware framework that the SEC says better reflects today’s electronic and uncertificated markets rather than paper-era rules.
According to the proposal, amendments to Rules 17ad-6 and 17ad-7 would set a single retention period for most transfer agent records and modernize rules for electronic systems and third-party recordkeepers. Amendments to Rules 17ad-1 and 17ad-9 would update terminology to match contemporary electronic recordkeeping and communications technology.
The SEC also outlined new governance requirements for safeguarding securities and funds, including a rewritten Rule 17ad-12 that would require written policies to identify, measure, monitor and mitigate material risks. The proposal would add requirements for a business continuity plan and a separate bank account for issuer, securityholder and third-party funds, and it would require written compliance policies under proposed Rule 17ad-30, citing blockchain data integrity, cybersecurity and operational risk as issues transfer agents would need to manage.
SEC Chair Paul Atkins said the proposal is meant to 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 share transfers.