The SEC is modernizing regulations for transfer agents, incorporating blockchain and tokenization, marking the first substantial update in 40 years.
The U.S. Securities and Exchange Commission (SEC) is set to modernize regulations for registered transfer agents, marking their first substantial update in over 40 years. The proposed changes include electronic record-keeping, the use of blockchain technology, and provisions for tokenized securities.
SEC Chair Gary Gensler emphasized that these updates aim to reflect the evolving practices of transfer agents, which now increasingly utilize electronic communications and blockchain in their operations. As of mid-2026, there were 327 registered transfer agents, with 272 under the SEC's jurisdiction.
Incorporating Blockchain and Tokenization
The SEC's proposal specifically highlights the role of distributed ledger technology (DLT) and tokenization in securities. Changes to Form TA-2 will require transfer agents to disclose:
- the number of securities issued using DLT for ownership records;
- details about tokenization providers and DLT platforms used;
- the classification of tokenized issuances between issuer-initiated and third-party models.
Moreover, a digital wallet address may now be included in identifying information for owners of tokenized securities. Commissioner Hester Peirce noted that as securities migrate to blockchain, the role of transfer agents could adapt, potentially replacing traditional identifiers with modern alternatives like email and wallet addresses.
“The transfer agent rule proposal, more than a decade in the making, is finally out. We welcome comment on all aspects, including implications for tokenization,” Hester Peirce stated on social media.
Additional Regulatory Changes
The SEC's proposal also introduces updates to Forms TA-1 and TA-2 and proposes the repeal of Rule 17ad-4, alongside new mandates:
- Rule 17ad-30 will require transfer agents to implement written compliance policies, subject to annual review by their governing bodies.
- Rule 17ad-31 will set standards for handling restrictive legends on securities, preventing transfer agents from facilitating unregistered transactions without legal compliance verification.
The repeal of Rule 17ad-4 will remove certain exemptions for record-keeping for specific security types. Additionally, the SEC is emphasizing the importance of risk management and business continuity for transfer agents. In May, Peirce cautioned the crypto sector to lower expectations regarding potential exemptions for trading tokenized assets, clarifying that synthetic assets are not on the table for approval.
