SEC Proposes Modernizing Transfer‑Agent Rules to Allow Blockchain as Official Shareholder Ledger

The U.S. Securities and Exchange Commission (SEC) released a proposal on September 1 to update transfer‑agent rules that have been in place since the late 1970s. The draft would allow blockchain or other distributed‑ledger technology to be used as a company’s master security‑holder file, or as part of it, while retaining a regulated transfer agent’s exclusive responsibility for the official shareholder record.

Key Elements of the Proposal

• Transfer agents may use on‑chain data – such as wallet addresses, balances, ownership percentages and purchase details – as the authoritative record of share ownership.
• Personal identifying information (full name and physical mailing address) would still be required in the master file, though the SEC is seeking comment on whether these requirements could be relaxed.
• The SEC would amend Form TA‑2 to require additional reporting on tokenized securities, tokenization agents and platforms.
• Use of blockchain is optional; agents can continue with conventional databases if they meet security, accuracy and accessibility standards.

Regulatory Oversight Remains With Transfer Agents

Even if a blockchain serves as the official ledger, the transfer agent would remain the gatekeeper, responsible for the file’s accuracy, security and regulatory reporting. Technology providers would not inherit the transfer agent’s regulatory obligations simply by hosting the on‑chain record.

Industry Response

Securitize, a registered transfer agent that already uses blockchain for digital securities and manages over $4 billion in assets, welcomed the draft, saying it aligns with a model the firm has advocated. The company emphasized that modernization should raise, not lower, standards.

Open Questions and Public Comment

The SEC is asking for feedback on several issues, including whether the requirement for a shareholder’s full name and physical address should be eliminated in favor of digital identifiers such as email or wallet addresses. Commissioner Hester Peirce has suggested that alternative identifiers could facilitate on‑chain securities trading.

Comments on the proposal are due 60 days after its publication in the Federal Register.