The U.S. SEC has proposed updates to decades-old rules governing transfer agents. The proposal revises rules and forms for registered transfer agents, which maintain the official records of securities ownership. The rules have not seen major changes since the late 1970s and early 1980s, despite major advances in technology and financial markets.
SEC Chairman Paul S. Atkins said the proposed changes reflect how transfer agents operate today, including their use of electronic systems and blockchain technology for securities offerings and transfers.
A key part of the proposal is the SEC’s recognition of blockchain as a recordkeeping system for securities. Transfer agents will be able to use blockchain networks to record who owns securities and track transfers.
Blockchain settlement makes securities transfers faster and more transparent as it reduces delays and improves how securities move between market participants.
The proposal also requires firms to report information about the tokenized securities they service, including the number of tokenized securities and the blockchain networks they use.
The proposal also benefits tokenized stocks and other traditional financial assets. Tokenization puts stocks, bonds, funds, and other securities on blockchain networks, allowing them to move through blockchain-based infrastructure.
Until now, regulatory uncertainty and the difficulty of connecting blockchain systems with traditional securities infrastructure have slowed institutional adoption.
However, the SEC is now creating a clear framework for companies building onchain securities markets by including blockchain in transfer-agent rules.
The changes also affect exchanges, brokers, custodians, and blockchain infrastructure providers. Exchanges and trading platforms can support more tokenized securities, while brokers and custodians build services around blockchain ownership and settlement.
Blockchain providers also benefit as financial institutions demand networks that support regulated securities transactions.
This leads to faster settlement, less friction, and better liquidity in some markets. The size of these benefits will depend on how quickly issuers, exchanges, brokers, custodians and investors adopt blockchain systems.
(adsbygoogle = window.adsbygoogle || []).push({});The proposal shows that blockchain is gaining recognition as financial-market infrastructure, not just technology for cryptocurrencies.
If the rules are finalized, they will give financial institutions more confidence that blockchain systems can operate within the U.S. securities framework. That will support further development of tokenized stocks, bonds, funds, and other assets.
