The U.S. Securities and Exchange Commission proposed a new rule last week that would comprehensively revise transfer agent rules that have been in place for decades. For the first time, the proposal explicitly says electronic databases, including blockchain ledgers, could be used as the official record of securities ownership.
If approved, the change could allow blockchain to become the primary securities record, replacing the parallel off-chain ownership records that tokenized securities still rely on today.
The proposal targets the two-record structure used by many tokenized securities
At present, many tokenized securities effectively run on two separate records: an on-chain token ledger and an official shareholder register. If the proposal is adopted, issuers and transfer agents may no longer need to maintain duplicate records and reconcile them after every transfer.
That could reduce operational friction and lower the risk of inconsistencies between on-chain records and legally recognized ownership records.
Industry executives say the process could shrink from two steps to one
Eli Cohen, chief legal officer at tokenized fund platform Centrifuge, said the proposal could turn the current “two-step” process into a “one-step” process, with the blockchain itself acting as the primary securities record.
The proposal does not mean tokenized securities would become fully permissionless. Joris Delanoue, chief executive of SEC-registered on-chain transfer agent Fairmint, said blockchain can remain open, but the assets would still have to comply with ownership and transfer rules. Regulatory controls such as identity verification and transfer restrictions would remain built into the tokens.
Transfer agents would still handle administrative events
Transfer agents would still be responsible for administrative matters such as shareholder death, inheritance, and legal notices. The processing window could fall from 3-5 days to 1 day.
The proposal’s 60-day public comment period is set to end in early November.