Who Keeps the Register? The SEC Rewrites Its Transfer Agent Rules After Forty Years

Rules Untouched for Forty Years

On September 1, the SEC proposed amendments to the rules and forms applying to registered transfer agents. The release is numbered 34-106246, File No. S7-2026-30, and runs to 421 pages. The fact sheet gives the Commission's proposal date as August 28; Federal Register publication followed on September 4, with comments due November 3. Transfer agents maintain the official record of ownership of an issuer's securities and process issuance, cancellation and transfer, forming a core component of the national clearance and settlement system. Yet most of these rules have gone without substantive revision since their adoption in the late 1970s and early 1980s. Commissioner Hester Peirce said the proposal had been more than a decade in the making, while Commissioner Mark Uyeda observed that in the intervening years no rulemaking followed, leaving a regulation-by-enforcement approach that he characterized as piecemeal and offering neither clarity nor predictability. Chairman Paul Atkins framed the proposal as streamlining and modernizing the rules to reflect current operations, including the use of electronic communications and blockchain technology.

What the Proposal Contains

The scope is broad. On registration, the effective date following a Form TA-1 filing would move from 30 days to 45, and agents would have to file an amended Form TA-2 within 60 days of discovering that previously filed information was materially inaccurate. On operations, turnaround standards would align with the current settlement cycle and the threshold triggering limitations on expansion would rise from 75% to 95%. Recordkeeping would move to a single retention period for most records, with modernized provisions on electronic systems and third-party arrangements. Rule 17ad-10, governing posting to master securityholder files, would adopt technology-neutral terms. Rule 17ad-12 on safeguarding funds and securities would be reframed as a comprehensive risk management rule, requiring identification, measurement, monitoring and mitigation of material risks including cybersecurity, a separate bank account for issuer, securityholder and third-party funds, and a business continuity plan. Rule 17ad-4, which provided certain exemptions, would be rescinded as no longer necessary given technological advances. Of the two new rules, 17ad-30 requires written compliance policies and procedures, but 17ad-31 carries greater practical weight. It would set requirements for placing and removing restrictive legends and would require registered transfer agents to refrain from facilitating unregistered securities transactions absent a reasonable basis to believe the transaction does not violate, or form part of a chain violating, Section 5(a) of the Securities Act of 1933. It places an explicit gatekeeping duty over the legality of transfers on the keeper of the register.

What the Tokenization-Model Column Signals

The changes to the reporting forms deserve particular attention. Proposed Question 5(b) on Form TA-2 would add checkboxes for service providers including "Tokenization Agent(s)" and "Distributed Ledger Technology Platform(s)," each with a field for names. Question 6(b) would require registrants to report issues serviced by tokenization model, split into issuer-sponsored and third-party-sponsored columns. That taxonomy maps precisely onto the dispute currently unfolding in US markets. A supervisor is beginning to distinguish, as a line on an annual filing, between equity tokens constructed offshore without a listed company's consent and tokenization in which the issuer participates. The cited authority is a staff statement of January 28, 2026, which held that a tokenized security has substance where the issuer or its agent maintains the master securityholder file on a crypto network. A staff view from seven months ago has become a column on a regulatory return. The release also puts an explicit question to the market about how to address situations where records exist solely on a blockchain not exclusively controlled by the transfer agent. As background, staff FAQs of May 15, 2025 had already confirmed that a registered transfer agent may use distributed ledger technology as its official master securityholder file, and may keep personally identifying information off-chain while recording transaction details on-chain, provided the records remain auditable and accessible. Securitize and tZERO are already SEC-registered transfer agents.

The Structural Contrast with Japan

Japan's counterpart is the shareholder register administrator, the securities agency business. The Companies Act imposes no qualification requirement on who may serve; a provision in the articles of incorporation and registration suffice. For listed companies, however, the Tokyo Stock Exchange's listing rules confine eligible share administration agencies to those the exchange approves, which in practice means trust banks together with Tokyo Securities Transfer Agent, Japan Securities Agents and IR Japan. Listed shares also sit within the book-entry transfer system under the Act on Book-Entry Transfer of Corporate Bonds and Shares, where the Japan Securities Depository Center serves as the book-entry institution and the shareholder register is prepared from notifications of all shareholders. Where the United States is admitting blockchain-native entrants through a registration regime, Japan offers essentially no institutional path for an outside technology provider to occupy the register function for listed equity. That Japanese security tokens have used beneficiary-certificate-issuing trusts, with the beneficiary register maintained on a blockchain, is in part a detour around a share register that cannot be opened. The US proposal moves in the opposite direction, opening the register function directly.

Business Development Insights

1. Regulatory attention is shifting from token issuance to the keeper of the register. Debate over recent years has concentrated on the threshold question of whether a token is a security; this proposal addresses registration requirements, risk management, recordkeeping and legality determinations for the entity that maintains ownership records. Financial institutions assessing tokenization businesses need to verify, alongside the legality of the issuance scheme, whether the operational requirements of a record-keeping entity can be met. The standard being proposed for US transfer agents — segregated bank accounts, business continuity plans, written compliance policies — is the standard of traditional fiduciary operations. The barrier for technology firms entering this function may be higher than assumed.
2. On-chain transfer restriction is becoming a regulatory requirement. New Rule 17ad-31 would govern the placement and removal of restrictive legends and require a reasonable basis for not facilitating unregistered transactions. For tokenized securities this connects directly to the design of transfer controls in smart contracts. How eligibility to receive a token is expressed in code, and how the basis for that determination is preserved in records, is simultaneously an engineering and a compliance question. Design capability here is one of the few areas Japanese trust banks and securities firms can extend directly from their existing securities agency business, and it merits early attention.
3. The issuer-sponsored versus third-party-sponsored distinction looks set to become a unit of regulatory reporting. That the SEC would embed this dichotomy in an annual form suggests the two may attract different supervisory treatment in future. When evaluating partnerships with or investments in overseas tokenization platforms, which category the business falls into becomes the first identifier for measuring regulatory change risk. Deals structured domestically by Japanese financial institutions fall essentially within the issuer-sponsored type, so if the classification takes hold internationally, they would occupy a relatively favorable position. The open question is how to close the gap with third-party-sponsored products, which have acquired liquidity first.

Sources

NADA NEWS, "US SEC to overhaul 1970s transfer agent rules — proposal addresses blockchain," September 2, 2026 https://www.nadanews.com/366535/ SEC, "SEC Proposes to Modernize Rules for Registered Transfer Agents" (Press Release 2026-81), September 1, 2026 https://www.sec.gov/newsroom/press-releases/2026-81-sec-proposes-modernize-rules-registered-transfer-agents SEC, "Fact Sheet: Proposed Transfer Agent Rule Modernization" https://www.sec.gov/files/34-106246-fact-sheet.pdf SEC, "Transfer Agent Rules," proposing release (Release No. 34-106246, File No. S7-2026-30) https://www.sec.gov/files/rules/proposed/2026/34-106246.pdf Federal Register, "Transfer Agent Rules," published September 4, 2026 https://www.federalregister.gov/documents/2026/09/04/2026-18190/transfer-agent-rules Decrypt, "SEC Proposes First Transfer Agent Overhaul in 40 Years, Citing Tokenization," September 2026 https://decrypt.co/377149/sec-proposes-first-transfer-agent-overhaul-in-40-years-citing-tokenization David Lopez-Kurtz, "Transfer Agent Provocateur" (Web3 vs. the Law), September 2026 https://davidlopezkurtz.substack.com/p/transfer-agent-provocateur Securitize Corp. Form 424B3 (including its summary of the SEC staff FAQs of May 15, 2025) https://www.sec.gov/Archives/edgar/data/0002094496/000162828026054866/securitizeholdings-424b3.htm BUSINESS LAWYERS, "What is a shareholder register administrator? Role under the Companies Act and how to appoint or change one" https://www.businesslawyers.jp/practices/591 Trust Companies Association of Japan, "Securities agency business" https://www.shintaku-kyokai.or.jp/products/corporation/securities_agency.html