SEC Modernizes Transfer-Agent Rules for Blockchain Tokenization Era

The U.S. Securities and Exchange Commission has proposed its first major update to transfer-agent rules since the 1970s, aiming to modernize securities record-keeping for an era of blockchain and tokenization.

In a proposal noted on September 1, SEC Chair Paul Atkins stated the rules should reflect how transfer agents work today and tomorrow, including their use of blockchain technology for securities offerings and share transfers. The move is part of the agency’s broader shift from paper records to electronic data.

The update is seen as a future-proofing step for the burgeoning tokenization of securities. While not a blanket endorsement of tokenization, the proposal recognizes the power of blockchains for maintaining ownership records.

An opinion piece argues that without clear, modernized rules, fragmented ownership data across token wrappers, special-purpose vehicles, broker ledgers, and off-chain databases could create a “Paperwork Crisis” for the blockchain age. Transfer agents are a critical component of the securities infrastructure, responsible for tracking ownership and facilitating corporate actions.