SEC lets blockchains record shareholder ledgers

The U.S. Securities and Exchange Commission on Sept. 1 proposed its first major overhaul of transfer-agent rules since the late 1970s, explicitly allowing blockchain and other distributed‑ledger technology to serve as a company’s master securityholder file while keeping registered transfer agents legally responsible for the official shareholder record.

Under the draft rules, a single recordkeeping transfer agent would retain exclusive control over the master securityholder file and remain responsible for its accuracy, security and production to regulators. The SEC said the rewrite replaces paper‑based requirements with electronic recordkeeping standards and adds reporting requirements for tokenization and distributed‑ledger arrangements.

Transaction details such as wallet addresses, balances, ownership percentages and purchase information could be stored on a distributed ledger, while sensitive personal information could remain in separate, off‑chain systems. Technology providers that host or operate distributed ledgers would not inherit a transfer agent’s regulatory obligations merely because shareholder records pass through their infrastructure.

Proposed changes to Form TA‑2 would require transfer agents to report when securities use distributed ledgers and to identify tokenization agents and platforms involved in those arrangements. The rule would codify staff guidance that has allowed transfer agents to use distributed ledgers as the official master securityholder file without keeping an off‑chain duplicate if regulatory requirements are met.

The SEC stopped short of allowing fully wallet‑native ownership. The draft rules would still require the master file to include each holder’s full name and a physical mailing address. A digital‑wallet address could be part of the identification record but would not replace those traditional identity elements. The agency is asking for public comment on whether transfer agents should have to collect full names and physical addresses and on the consequences of removing those requirements.

SEC Chairman Paul Atkins described the proposal as reflecting “the growing use of electronic communications and blockchain technology in securities offerings and share transfers.” Commissioner Hester Peirce has noted that email or digital‑wallet addresses might be acceptable substitutes in some cases to facilitate on‑chain trading.

Market participants experimenting with tokenized securities welcomed the proposal while urging that investor protections remain. Securitize, a registered transfer agent and tokenized asset manager with more than $4 billion under management, wrote that “Modernization should raise standards, not lower them,” calling regulatory clarity a tailwind for digital securities adoption.

Comments on the proposal are due within 60 days after publication in the Federal Register; as of Sept. 1 the SEC had not set a fixed publication date. The draft would update decades‑old rules to accommodate electronic recordkeeping and link on‑chain positions to identifiable shareholders through regulated transfer agents.