The U.S. Securities and Exchange Commission proposed an overhaul of its transfer agent rules on Sept. 1 that would account for electronic and blockchain-based share records while adding updated record-retention, risk-management and compliance requirements.
The direct obligations would fall on registered transfer agents, including tokenization firms or issuers that hold that status. For blockchain-based registries, the proposal’s practical effect would be to place their recordkeeping systems inside a modernized, technology-aware rule framework rather than rules largely written when investors commonly held paper certificates.
The SEC’s fact sheet says proposed amendments to Rules 17ad-6 and 17ad-7 would establish a single retention period for most transfer agent records and modernize provisions governing electronic systems and third-party recordkeepers.
Amendments to Rules 17ad-1 and 17ad-9 would update terminology to reflect contemporary electronic recordkeeping and communications technology. Across the proposal, the SEC also identifies blockchain-based recordkeeping and uncertificated securities as technologies the modernized rules would address.
A rewritten Rule 17ad-12 would require transfer agents to maintain written policies designed to safeguard securities and funds and to identify, measure, monitor and mitigate material risks arising from their operations. Transfer agents would also need a business continuity plan and a separate bank account for issuer, securityholder and third-party funds. Proposed Rule 17ad-30 would separately require written compliance policies and procedures.
