The Securities and Exchange Commission (SEC) has proposed the first substantial rewrite of its transfer agent rulebook in roughly 40 years, and buried inside it is the question the tokenised-equity build-out has been deferring: whether a distributed ledger can hold the official register of share ownership, or only mirror one that lives somewhere else.

The proposal, published at 91 FR 56946 on September 4, 2026 under Release No. 34-106246 and File No. S7-2026-30, would amend the definition of the “master securityholder file” in Rule 17Ad-9(b) so that the register must be electronic and may sit on any technology the agent chooses — including a blockchain — “provided the transfer agent maintains at all times exclusive control.” The Commission permits a ledger without requiring one, and does not resolve what happens when the ledger is not exclusively controlled. What follows covers the operative language, the rescission of Rule 17Ad-4, the enforcement backdrop, and what is left open.

Methodology and sources

This analysis rests on the full text of the proposing release as published on September 4, 2026 (91 FR 56946–57061), read in full rather than from the press release, together with the SEC’s announcement of September 1, 2026 and Commissioner Mark T. Uyeda’s statement of the same date. Comparative material comes from primary legislation only: the German Gesetz über elektronische Wertpapiere (eWpG) of June 3, 2021, the Swiss Code of Obligations as amended by the Distributed Ledger Technology (DLT) Act, and the United Kingdom’s Digital Securities Sandbox regulations. Enforcement material comes from the SEC’s own settled orders. This is a proposal at the comment stage; nothing described here is in force, and the Commission has adopted nothing.

What a transfer agent is, and why the master securityholder file is the whole argument

A registered transfer agent keeps, on the issuer’s behalf, the official list of who owns an issuer’s registered securities. The release says transfer agents “have direct responsibility for maintaining on behalf of the issuer the currency and integrity of the official list of the registered owners of an issuer’s stocks and bonds.” Elsewhere it calls that list the “golden record” of ownership.

The master securityholder file is the SEC’s name for the legal register of record ownership of a US issuer’s securities, maintained by a registered transfer agent under Rule 17Ad-9(b). It sits above the Depository Trust Company chain: most publicly traded shares are registered to Cede & Co. as nominee, and beneficial owners hold security entitlements against intermediaries under Article 8 of the Uniform Commercial Code. Only one agent may act for a given issue — proposed Rule 17Ad-9(h) states that “There can be only one recordkeeping transfer agent for a given issue of securities.” That single-record constraint is why the tokenisation question matters. A token that is not the master securityholder file is, legally, a representation of an entry held elsewhere, and its holder’s rights run through whoever controls that entry rather than through the token itself.

The rules have not been substantively updated since the late 1970s and early 1980s. A concept release a decade ago — Exchange Act Release No. 76743 (December 22, 2015), 80 FR 81948 — produced no rulemaking. Since then, the release says, “market participants are actively seeking to bring blockchain-native, or ‘onchain’ transfer agents into the U.S. market.”

What the proposal actually says about distributed ledgers

The operative language is worth quoting rather than paraphrasing. Proposed Rule 17Ad-9(b) would read: “Master securityholder file is the official list of individual securityholder accounts maintained by a registered transfer agent. The master securityholder file shall be maintained in electronic form and may consist of multiple linked files or systems. The specific technology, systems, or files that compose the master securityholder file are within the transfer agent’s discretion, provided the transfer agent maintains at all times exclusive control over the master securityholder file.”

The release then makes the permission explicit, and the limit with it: “the amended definition 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.” That is a permission conditioned on a control test, not a recognition of onchain title.

Two words carry the weight. “Official” makes the file the register rather than a copy. “Exclusive control” requires the transfer agent — a registered, examinable intermediary — to hold that register alone. A permissionless chain on which anyone may write, and on which a token moves without the agent’s involvement, does not obviously meet that condition. The release does not say it fails, either. It asks, at question 84: “How should the Commission address situations where records exist solely on a blockchain or distributed ledger that is not exclusively controlled by the transfer agent?” That is the ambiguity, in the Commission’s own words, left open.

The plumbing is equally unresolved. Question 83 asks whether the rules let agents associate “onchain database records” such as wallet address and quantity owned “with offchain database records” so that an onchain transfer “results in a corresponding transfer of the security on the master securityholder file.” That still treats the chain as the trigger and the file as the record that follows.

Where the release is concrete is in surveillance. Proposed Form TA-2 adds Question 4(e), on “the number of issues for which the registrant maintained the master securityholder file using distributed ledger technology”, and Question 6(b), on issues by tokenisation model. The service-provider table gains tick-boxes for “Tokenization Agent(s)” and “Distributed Ledger Technology Platform(s)”. Whatever the legal outcome, the SEC is building the dataset first.

How four jurisdictions treat the ledger as legal record

Jurisdiction / Regulator	Instrument and date	Scope	Key requirement	Is the ledger the legal record?
US (SEC)	Proposed Rule 17Ad-9(b), Release No. 34-106246, September 4, 2026	327 registered agents	File must be electronic; technology at the agent’s discretion, “provided the transfer agent maintains at all times exclusive control”	Permitted, not recognised. Question 84 leaves non-exclusive ledgers open
Germany (BaFin)	eWpG, June 3, 2021, in force June 10, 2021	Bearer bonds, registered shares (§ 1)	Security issued by register entry, not certificate; a crypto securities register must run on a tamper-proof system (§§ 2, 16)	Yes. Under § 3(1) the holder is whoever is entered in the register
Switzerland (Code of Obligations)	Art. 973d CO, DLT Act of September 25, 2020, in force February 1, 2021	Rights registered in a securities ledger	The ledger must give “the creditors, but not the obligor, power of disposal over their rights”	Yes. The right “may be exercised and transferred to others only via this securities ledger”
UK (Bank of England / FCA)	SI 2023/1398, made December 14, 2023, in force January 8, 2024	Firms admitted to the Digital Securities Sandbox	Supervised, temporary modification of settlement and recordkeeping law	Not in general law. Legal effect applies inside a time-limited sandbox

Sources: Release No. 34-106246; eWpG; Art. 973d CO; SI 2023/1398. Updated September 8, 2026.

Germany, Switzerland and the United States answer the register question in three different ways. Germany made the register entry constitutive: under § 3(1) of the eWpG, in force since June 10, 2021, the holder of an electronic security is whoever is entered in the register, and § 4(3) creates a separate category, the Kryptowertpapier, for securities in a crypto securities register. Switzerland’s Art. 973d, in force since February 1, 2021, requires the ledger to give power of disposal to creditors “but not the obligor” — close to the inverse of the SEC’s demand that a registered intermediary hold exclusive control. The United Kingdom conferred no general legal effect, building a supervised enclosure under SI 2023/1398 instead. The SEC proposal is neither a recognition regime nor a sandbox, but a technology-neutral recordkeeping rule that leaves the door ajar.

These tests differ in kind, not stringency, as our coverage of South Korea’s staged tokenisation timetable and the London Stock Exchange’s tokenised equity arrangement has shown.

“It has been 40 years since the Commission last significantly updated its transfer agent rules.”

“Developments such as distributed ledger technology and tokenization, which were barely on the horizon in 2015, are now reshaping how transfer agents perform their core functions.”

— Mark T. Uyeda, Commissioner, U.S. Securities and Exchange Commission (Statement on Proposed Amendments to the SEC’s Transfer Agent Rules, September 1, 2026)

Enforcement context: why Rule 17Ad-12 is being rebuilt

Footnote 325 cites two settled matters as the basis for reframing the safeguarding rule. The first is In the Matter of Columbia Management Investment Services Corp., Exchange Act Release No. 80016 (February 10, 2017), where the agent’s records management manager “viewed sensitive personal account information such as addresses, dates of birth, and identification numbers” to misappropriate deceased shareholders’ assets.

The second matters more for anyone contemplating an onchain register. In the Matter of Equiniti Trust Company, LLC f/k/a American Stock Transfer & Trust Company, LLC, Exchange Act Release No. 100780 (August 20, 2024), a settled proceeding, found that the agent “suffered two separate cyber incidents in 2022 and 2023, respectively, that led to the net loss of approximately $4.08 million total in client funds”. The SEC’s announcement recorded an $850,000 civil penalty and charges under Section 17A(d) of the Securities Exchange Act of 1934 and Rule 17Ad-12. Monique C. Winkler, Director of the SEC’s San Francisco Regional Office, said the firm “failed to provide the safeguards necessary to protect its clients’ funds and securities from the types of cyber intrusions that have become a near-constant threat to companies and the markets.”

Rule 17Ad-12 was written in 1982 around dual-control vaults, closed-circuit television and security guards. The proposal reframes it as an outcomes-based risk-management rule: policies covering misappropriation, damage and unauthorised access; segregation of client funds in an account designated “for the benefit of”; business continuity plans; and a framework to mitigate custody, operational and cyber risk.

What rescinding Rule 17Ad-4 does to 194 firms

Rule 17Ad-4 exempts limited partnership interests, dividend reinvestment plans and certain fund shares, plus low-volume “exempt transfer agents”, from the turnaround and recordkeeping rules. The Commission would rescind it “in its entirety”, reasoning that “the vast majority of transfer agents now regularly turn around routine items within one business day or less”. Up to 194 registered transfer agents “would be required to comply with Rules 17ad-2, 17ad-3, and 17ad-6, as proposed to be amended, and likely would incur compliance costs.”

That is close to three-fifths of the population, and it lands on the smallest firms. The economic analysis concedes as much: the benefit “may be limited for smaller transfer agents, which are more likely to lack the resources to bolster their internal control systems”, and question 77 asks whether rescission “would cause small transfer agents to exit the market or consolidate”. Extending Rule 17Ad-13’s accountant’s report to 16 firms is costed at $40,000 each per year.

What this means for transfer agents, issuers, platforms and compliance teams

Registered transfer agents. All 327 registrants would need written policies under proposed Rule 17Ad-30, approved by the board at least annually. Rule 17Ad-31(a) would require a current list of issuer employees authorised to instruct on restrictive legends, and a bar on acting for anyone else. Retention moves to a uniform six-year period, and the file must meet proposed Rule 17Ad-7(f)(2) — integrity, accessibility, reproducibility, redundancy and continuity, plus an audit trail logging access, modification and deletion with user and timestamp.

Issuers and fund sponsors. Transfer agent agreements would have to be in writing under amended Rule 17Ad-6(a)(8). Issuers of tokenised share classes should expect their agent’s Form TA-2 to disclose the tokenisation model, making the issuer-sponsored versus third-party-sponsored choice a reported fact — a distinction running through arrangements such as BlackRock’s tokenised money market share classes.

Tokenisation platforms. The test is control, not architecture. A platform wanting its chain to be the register needs a registered transfer agent able to demonstrate exclusive control at all times, an audit trail satisfying Rule 17Ad-7(f)(2), and production on demand under Section 17(b) of the Exchange Act. Structures where the onchain balance wraps an omnibus position held elsewhere — the pattern examined in Monetae’s 70 tokenised US stocks — remain mirrors.

Legal and compliance teams. Questions 76 to 78 on Rule 17Ad-4, and 82 to 84 and 88 on blockchain-based records, are where the drafting is genuinely open.

“This proposal would streamline and modernize the Commission’s rules to reflect transfer agents’ current processes and operations, including the use of electronic communications and blockchain technology in connection with securities offerings and the transfer of shares.”

— Paul S. Atkins, Chairman, U.S. Securities and Exchange Commission (SEC press release 2026-81, September 1, 2026)

What is next, and what is contested

Comments are due November 3, 2026 through the Commission’s comment file for S7-2026-30. The release proposes no compliance date; question 78 asks what transition period “would be appropriate” after rescission of Rule 17Ad-4, so the phase-in for the 194 firms is itself open.

Three things are contested. First, the control test: whether “exclusive control” is technical, legal, or both, and whether a permissioned chain with the agent as sole writer satisfies it while a public chain does not. The release does not say. Second, cost: $78.1m initial and $27.8m annual against benefits recorded as not monetisable is the asymmetry that attracts Administrative Procedure Act scrutiny, particularly where the burden falls on firms handling fewer than 1,000 items a year. Third, the Commission is collecting distributed-ledger data before deciding what such a ledger legally is.

What this rulemaking will not settle is title. Nothing in it changes Article 8 of the Uniform Commercial Code, the nominee structure, or state law on share registers. A transfer agent may run its register on a chain; a chain does not thereby become a transfer agent. That distinction already shapes how US venues handle tokenised equities, as our analysis of synthetic versus real tokenised stocks set out.

Frequently asked questions

Has the SEC approved the use of blockchains as share registers?

No. This is a proposed rule at the comment stage, published on September 4, 2026 with comments closing November 3, 2026. The Commission has adopted nothing and has not committed to adopting anything. If finalised as drafted, amended Rule 17Ad-9(b) would permit a registered transfer agent to maintain the master securityholder file using distributed ledger technology, subject to an exclusive-control condition, but it declines to endorse any particular technology.

What is the master securityholder file?

It is the official list of individual securityholder accounts that a registered transfer agent maintains for an issue of securities, defined in Rule 17Ad-9(b). The release also calls it the “golden record” of securities ownership, and only one recordkeeping transfer agent may maintain it per issue. It is the register that determines corporate distributions, communications and ownership rights, which is why its status governs whether a tokenised holding is title or a representation of it.

What does “exclusive control” mean in the proposal?

Proposed Rule 17Ad-9(b) leaves the technology to the agent’s discretion “provided the transfer agent maintains at all times exclusive control over the master securityholder file.” The release does not define the term for distributed ledger contexts. It asks, at question 84, how to address records existing solely on a ledger “that is not exclusively controlled by the transfer agent”. Treat it as unresolved until the Commission responds.

Which transfer agents are affected by rescinding Rule 17Ad-4?

Rule 17Ad-4 exempts limited partnership interests, dividend reinvestment plans and certain fund shares, plus low-volume “exempt transfer agents”, from turnaround and recordkeeping requirements. Rescinding it would newly require up to 194 registered transfer agents to comply with Rules 17Ad-2, 17Ad-3 and 17Ad-6 as amended. A further 16 firms would need the accountant’s report under Rule 17Ad-13, costed at $40,000 a year each.

What happens after the comment deadline?

The Commission reviews comments and may adopt, re-propose, modify or abandon the rules. No compliance date is proposed; question 78 asks what transition period would suit firms losing the Rule 17Ad-4 exemption. No statutory deadline compels adoption, and the 2015 concept release on the same subject produced none. Firms should plan against the current rules until a final release is published.

This article is informational analysis only and does not constitute legal, regulatory, tax, or investment advice. Regulatory frameworks change frequently and interpretation depends on facts and circumstances; primary documents and official regulator guidance always supersede summaries. Firms should consult qualified legal counsel and their relevant supervisory authority before taking any action based on the analysis above.