The US Securities and Exchange Commission (SEC) has unveiled plans to modernise transfer agent rules, aiming to mitigate risks linked to blockchain-based recordkeeping and tokenised securities. The proposed changes, which include expanded reporting requirements and updated compliance standards, seek to align the regulatory framework with advancements in digital market infrastructure. The current rules, largely unchanged since the 1970s and 1980s, are deemed insufficient to address evolving challenges such as cybersecurity threats and operational resilience.
The draft rules introduce specific provisions for restrictive legends on tokenised assets and stricter oversight of third-party service providers involved in digital securities transactions. These measures are intended to enhance transparency and reduce vulnerabilities in a sector increasingly reliant on decentralised technologies. The SEC has emphasised that the existing framework fails to accommodate developments such as the rise of blockchain-native transfer agents, which are now being explored by market participants.
Public feedback on the proposal will be accepted for 60 days following its publication in the Federal Register. The SEC has stated that stakeholder input will be critical in shaping the final rules, which could influence the trajectory of tokenised securities markets. Analysis from Cahill Gordon & Reindel highlights that the SEC is “on a mission to simplify its rules,” reflecting broader efforts to adapt legacy systems to contemporary financial technologies.
The overhaul underscores the SEC’s recognition of the growing role of blockchain in capital markets, as well as its commitment to balancing innovation with regulatory safeguards. Industry experts suggest the updated rules may accelerate the adoption of tokenised assets while addressing concerns about fraud, market integrity, and investor protection in a rapidly evolving landscape.
Written by Steven Cook
Regulation Desk
