The SEC proposes to let a blockchain be the legal record of who owns a share

What happened

The Securities and Exchange Commission proposed on 1 September to rewrite the rules governing registered transfer agents, in Release No. 34-106246, File No. S7-2026-30. The press release quotes Chairman Paul S. Atkins saying the proposal would modernise the rules 'including the use of electronic communications and blockchain technology in connection with securities offerings and the transfer of shares', and the fact sheet says the rules would reflect 'the use of electronic and blockchain-based recordkeeping and uncertificated securities'. The operative sentence is in the 421-page release: the amended definition of the master securityholder file 'would permit a transfer agent to utilize a blockchain or other distributed ledger technology as its master securityholder file, or a component thereof, but it would not mandate it'. The Commission would also start counting it. New Form TA-2 Question 4(e) asks for the 'Number of issues for which Registrant maintained the master securityholder file using distributed ledger technology, in whole or in part, during the reporting period'; new Question 6(b) splits tokenized issues into issuer-sponsored and third-party sponsored 'as the risks to investors differ depending on the tokenization model'; and the service provider checklist adds boxes for 'Tokenization Agent(s)' and 'Distributed Ledger Technology Platform(s)'. Comments are due 60 days after publication in the Federal Register.

Why it matters

The master securityholder file is the record that says who owns a company's shares. Every tokenized equity built so far has been a wrapper, a token that points at a share entered on somebody else's register, which is why the Commission's own staff statement of January 2026 had to distinguish issuer-sponsored tokenized securities from third-party sponsored ones and warn that the second kind may carry different rights from the security underneath. If the register itself may sit on a chain, the distinction starts to collapse from the right end: the token stops referring to ownership and becomes the entry that constitutes it. It also arrives on the same day as the London Stock Exchange's statement that it is designing a UK tokenized equity structure meant to preserve shareholder rights, which is the structure that needs a register like this to exist.

What is not settled

This is a proposal, and the questions the Commission asks are more revealing than the text it proposes. Request for comment 84 asks how to handle records that 'exist solely on a blockchain or distributed ledger that is not exclusively controlled by the transfer agent'; 105 asks whether a file kept only on an immutable chain should be exempt from the deletion requirement in Rule 17ad-10(f), 'given that records created on such networks cannot be "deleted" in the traditional sense'; and 50 asks flatly whether any specific conditions should attach to using a blockchain as the file at all. Commissioner Hester Peirce, who says in her statement that she will not be at the Commission when the rule is finalised, asks whether transfer agents should still have to collect 'names and physical addresses of securityholders or should the rule allow other identifiers, such as email and digital wallet addresses, to be collected instead'. How old the rules are is itself unsettled between the accounts: the Commission says only that they have not been substantively updated since they were first adopted in the late 1970s and early 1980s, Decrypt calls this the first overhaul in 40 years, CryptoSlate calls the rules 50 years old, and Commissioner Mark T. Uyeda's statement measures a different span again.