The U.S. Securities and Exchange Commission (SEC) has presented a long-awaited draft update to requirements for registered transfer agents—key intermediaries that ensure the recordkeeping and transfer of rights to securities. This is the first such large-scale revision of rules since the late 1970s and early 1980s, and it directly addresses the realities of the modern market: electronic document flow, tokenized assets, and the use of distributed ledgers.

SEC Chairman Paul Atkins emphasized that the initiative aims to bring rules in line with current operational processes, including the use of blockchain in the issuance and transfer of shares. To date, 327 transfer agents fall under the regulator's jurisdiction, of which the SEC serves as the primary oversight body for 272.

Blockchain and Tokenization: New Reporting Requirements

The key innovation is the direct recognition of distributed ledger technology within the regulatory framework. Under the updated Form TA-2, transfer agents will be required to disclose:

  • the number of issues where the holder registry is maintained on DLT, in whole or in part;
  • data on tokenization providers and the blockchain platforms used;
  • separate statistics on tokenized issues broken down by model—initiated by the issuer or by a third party.

Moreover, the regulator allows the use of a digital wallet address as an identifier for the holder of a tokenized security. Commissioner Hester Peirce, known for her pro-crypto stance, noted that as securities move on-chain, the role of transfer agents could fundamentally transform. The SEC has also opened a dialogue on whether modern identifiers (e-mail, wallets) could fully replace traditional beneficiary data.

Structural Changes: New Rules and Repeal of Outdated Norms

Beyond reporting, the package includes the repeal of Rule 17ad-4, which provided exemptions for limited partnerships, dividend programs, and small agents. In its place, two new requirements are introduced:

  1. Rule 17ad-30—requires agents to implement written compliance policies and procedures subject to annual approval by the board of directors.
  2. Rule 17ad-31—establishes strict frameworks for removing restrictive legends and prohibits facilitating unregistered transactions without sufficient legal grounds.

Additionally, the SEC is tightening approaches to risk management, client asset protection, and business continuity.

Recall that Peirce previously urged the industry not to expect "innovative exemptions" from the regulator for synthetic assets. However, this step is a clear signal: the SEC is ready to integrate blockchain into the legal market infrastructure, but strictly within existing investor protection paradigms.

My comment: This is a landmark event. For the first time in forty years, the regulator is not merely adapting to technology but actively embedding it into the operational fabric of the market. However, the introduction of Rule 17ad-31 could significantly complicate life for small agents unprepared for comprehensive compliance. In the medium term, this will accelerate market consolidation and the shift toward large infrastructure players with blockchain expertise.