SEC proposes transfer agent overhaul for tokenized securities

The U.S. Securities and Exchange Commission has proposed its first major transfer-agent rule overhaul in more than four decades as blockchain recordkeeping, tokenized securities and automated systems enter regulated U.S. markets. Summary The SEC proposal would update registration, recordkeeping, transfer processing, and asset-safeguarding requirements. Onchain transfer agents would face controls covering digital records, cybersecurity risks, and business continuity. New standards would govern restrictive legends, paying-agent services, and outside technology providers. Public comments will remain open for 60 days after Federal Register publication. The SEC, in a proposed rule, said most of its transfer-agent requirements date from the late 1970s and early 1980s, when investors commonly held paper certificates and firms processed ownership changes manually. Transfer agents maintain an issuer’s official ownership records, register securities transfers and monitor whether a company issues more securities than authorized. Many also process dividends, interest payments, fund redemptions, and other corporate actions. Under the proposal, the commission would update rules covering transfer...