SEC proposes first transfer agent overhaul in 40 years, citing tokenization

The SEC proposed the first substantive rewrite of its transfer agent rules since the early 1980s. The 421-page release published Tuesday addresses blockchain recordkeeping and tokenized securities. Transfer agents maintain official records of securities ownership and handle issuance, cancellation and transfers. The release says market participants are seeking blockchain-native transfer agents in the U.S. market. Firms are developing blockchain-based recordkeeping, tokenized fund administration and cross-chain interoperability models. These models would require agents to maintain securityholder records on distributed ledgers and operate smart-contract-driven processes. Proposed Form TA-2 changes would require agents to report how many issues have their master securityholder file on a distributed ledger. The changes would also divide tokenized issues into issuer-sponsored and third-party-sponsored categories. The SEC linked that distinction to differing investor risks in a January 2026 staff statement. The release asks how to treat records held only on a ledger that an agent does not exclusively control. It also asks whether agents can link a wallet address and the quantity held to offchain records containing a holder's name and address. Commissioner Hester Peirce said the proposal was more than a decade in the making. Peirce invited comments on its implications for tokenization. Commissioner Mark T. Uyeda said the Commission did not pursue rulemaking for over a decade after its 2015 concept release. Uyeda described the Commission's approach during that period as regulation by enforcement. SEC Chairman Paul S. Atkins said the rules would reflect agents' use of electronic communications and blockchain technology. The proposal would rescind an exemption rule. It would establish one retention period for most records. It would also make safeguarding a risk-management requirement covering cybersecurity and business continuity. The SEC separately announced a September 17 roundtable on 24-hour trading. Comment on the transfer agent proposal closes 60 days after publication in the Federal Register.