SEC Proposes First Transfer Agent Overhaul in 40 Years, Citing Tokenization
The SEC proposed the first major rewrite of transfer agent rules since the early 1980s, updating requirements for electronic recordkeeping, blockchain, and tokenized securities. Transfer agents keep the official ownership record for securities and manage issuance, transfer, and cancellation. The proposal reflects growing interest in “onchain” transfer agents that would use distributed ledgers, smart contracts, and tokenized fund administration. Key changes would expand Form TA-2 to report issues whose master securityholder file sits on a distributed ledger and distinguish issuer-sponsored from third-party-sponsored tokenized issues. The SEC also asks how to handle records stored on ledgers an agent does not fully control and whether onchain transfers can update offchain ownership records automatically. The proposal would rescind an exemption, unify most record-retention periods, and recast safeguarding rules as cybersecurity and business-continuity risk controls. Commissioners said the overhaul brings long-delayed clarity after years without rulemaking. Comments are due 60 days after Federal Register publication.
