SEC Proposes Modernized Transfer Agent Rules to Cover Blockchain

The U.S. Securities and Exchange Commission has proposed updating its transfer agent rules so that they account for electronic recordkeeping, electronic communications and blockchain's role in the issuance of securities and the transfer of share ownership. The rule change is intended to refresh the existing framework so it works in a digital-age environment, according to a report carried by Techub News from Cointelegraph. Under the proposal, transfer agents would be allowed to use blockchain when securities are issued and when shares change hands. In practical terms, the SEC would let the technology serve as part of the recordkeeping and communication infrastructure that surrounds securities ownership. The proposal also covers how electronic records and communications are reflected in the obligations of transfer agents. Taken as a whole, the move signals that the commission officially recognizes the application potential of distributed ledger technology in traditional financial infrastructure, while leaving the detailed mechanics of any future implementation to be shaped through the normal rulemaking process.