SEC plans to update transfer agent rules, focusing on on-chain share registration and avoiding a "new paper crisis"

PANews reported on September 30, citing CoinDesk, that the U.S. SEC proposed on September 1 its first major revision to transfer agent rules since the 1970s, aiming to bring blockchain technology into the securities registration and settlement system. The proposal emphasizes that transfer agents, as the "official record" of share ownership, may in the future use distributed ledger technology to record and transfer securities, but must avoid the risk of fragmented ownership data caused by the coexistence of token wrapping, SPVs, broker internal ledgers and offline databases. Institutions such as Fairmint argue that the on-chain cap table itself should serve as the official ledger required under Section 17A of the Exchange Act, rather than having tokens merely act as a "wrapper" for off-chain equity. The author calls on the SEC to distinguish between "native on-chain registration" and "off-chain asset token wrapping" models in Form TA-2, update holder identity identification methods, and recognize that smart contracts can be used to automate compliance and restrict transfers.