The U.S. Securities and Exchange Commission has proposed modernizing rules for transfer agents to reflect the use of blockchain technology, electronic communications and tokenized securities.
Transfer agents track changes in securities ownership, a role increasingly affected by instant, publicly visible onchain transactions as financial markets adopt tokenized assets.
The proposed rule would update regulations that were last revised decades ago and is open for public comment for 60 days. The changes would modernize the framework, including the use of electronic communications and blockchain technology in connection with securities offerings and the transfer of shares,” SEC Chairman Paul Atkins said in a statement.
The proposal would permit blockchains to serve as official transaction records while introducing additional operational requirements for transfer agents, including cybersecurity controls.
SEC Commissioner Hester Peirce highlighted a key issue for the cryptocurrency industry in a statement on Tuesday:
“Should transfer agents continue to be required to collect names and physical addresses of securityholders or should the rule allow other identifiers, such as email and digital wallet addresses, to be collected instead?”
The proposal comes after crypto platform Bullish, the parent company of CoinDesk, acquired transfer agent Equiniti in a $4.2 billion deal.
