The U.S. Securities and Exchange Commission (SEC) has announced a new rule change proposal aimed at modernizing decades-old regulations for registered transfer agents. The regulation seeks to more clearly reflect the use of electronic communications, digital record systems, and blockchain technology in securities issuances and share transfers within existing rules.
In a statement released today, the SEC noted that transfer agents play a critical role in the clearing and settlement infrastructure of the U.S. securities markets. The agency stated that much of the current transfer agent regulation was established in the late 1970s and early 1980s and has not been comprehensively updated since then.
According to the SEC, while transfer agents today offer a far wider variety of services than in the past, the current regulatory framework does not adequately cover all of these activities. The new proposal aims to both modernize federal transfer agent rules and ensure the continued secure and efficient operation of the U.S. securities markets and the national clearing and settlement system.
SEC Chairman Paul S. Atkins, noting that the regulatory proposal would better reflect the current processes and operations of transfer agents, specifically highlighted blockchain technology. Atkins stated that the proposal would consider the use of blockchain in electronic communication methods as well as in connection with securities issuances and share transfers.
Jamie Selway, Director of the SEC’s Division of Trade and Markets, said that with changing technology and competitive market conditions, it is necessary to re-evaluate old regulations. Selway noted that the proposal is an important part of the SEC’s efforts to adapt the regulatory framework to the modern era.
The new regulatory package takes into account the widespread use of electronic record-keeping and communication methods by transfer agents, and the new services they offer to issuers, investors, and other market intermediaries. The SEC stated that the proposal includes changes to some existing rules and forms, the repeal of one regulation, and the introduction of new rules governing the operations of registered transfer agents.
The proposal has been published on the SEC’s website and will also be published in the Federal Register. The public comment period will be 60 days after the regulation is published in the Federal Register.
