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The U.S. Securities and Exchange Commission on September 1, 2026 proposed to update the rules and forms that apply to registered transfer agents, the firms that maintain issuers’ official records of securities ownership and process transfers within the national clearance and settlement system. The Commission’s transfer agent rules have not been substantively updated since the first rules were adopted in the late 1970s and early 1980s. The proposal would amend the registration and annual reporting forms, modernize the processing, recordkeeping, and safeguarding rules, rescind one existing rule, and introduce two new rules covering compliance programs and restrictive legends.

Transfer agents perform statutory functions defined under Section 3(a)(25) of the Securities Exchange Act of 1934, including countersigning securities upon issuance, monitoring issuance with a view to preventing unauthorized issuance, registering the transfer of securities, exchanging or converting securities, and transferring record ownership of securities by bookkeeping entry. Any person performing those functions for a qualifying security must register with the Commission or another appropriate regulatory agency under Section 17A(c)(1) of the Exchange Act.

“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,” said SEC Chairman Paul S. Atkins.

“As technology changes and the competitive marketplace evolves, good government requires revisiting legacy rules and regulations,” said Jamie Selway, Director of the SEC’s Division of Trading and Markets. Selway described the proposal as another step in Chairman Atkins’ efforts to advance the agency’s regulatory framework.

The proposing release states that transfer agents are increasingly operating with tokenized securities, artificial intelligence, and other forms of digital infrastructure, and that market participants are actively seeking to bring blockchain-native, or “onchain,” transfer agents into the U.S. market. According to the release, the current transfer agent rules are silent with respect to information security, cybersecurity, disaster recovery, and operational risk, and no Commission rules specify transfer agents’ obligations in connection with removing restrictive legends on securities.

Proposed Changes to Existing Rules and Forms

Under proposed amendments to Rule 17ac2-1, a transfer agent’s registration would become effective 45 days after the filing of Form TA-1, or any amendment to a pending application, rather than the 30 days the existing rule specifies. The Commission said 30 days is often insufficient to determine whether to accelerate, deny, or postpone a registration application.

Proposed amendments to Rule 17ac2-2 would require a transfer agent that discovers information reported on a previously filed Form TA-2 was materially inaccurate, misleading, or incomplete at the time of filing to correct it by filing an amendment within 60 days of the discovery. The existing rule permits, but does not require, such corrections and specifies no time period for them.

Form TA-1 would gain new questions requiring disclosure of the registrant’s website address, any other SEC registrations, any other federal, state, or foreign registrations, and any control affiliates together with their registrations. Registrants would also attach an organizational diagram depicting the relationship between the transfer agent and its control affiliates. The form would add checkboxes for limited liability companies and trusts, remove two existing questions on service company arrangements as duplicative of Form TA-2 reporting, and update instructions defining the control persons who must be disclosed, including, for corporate registrants, each direct or indirect beneficial owner of 5% or more of any class of the registrant’s equity securities, with a person presumed to be a control person at 25% or more of voting securities or profits.

According to the Commission’s fact sheet, the proposal would also modernize the definitions in Rules 17ad-1 and 17ad-9 to reflect contemporary electronic recordkeeping and communications technology. Rules 17ad-2 and 17ad-3 would be amended to require written policies and procedures reasonably designed to ensure timely turnaround and processing, to align turnaround with the current settlement cycle, and to increase the threshold for the imposition of limitations on expansion from 75% to 95%. Rules 17ad-6 and 17ad-7 would establish a single retention period for most transfer agent records and modernize provisions governing electronic systems and third-party recordkeeping. Rule 17ad-10’s posting timeframe would be aligned with the modern settlement cycle using technology-neutral terms. Rule 17ad-12 would be reframed as a comprehensive risk management rule requiring written policies and procedures to protect securities and funds, identify and mitigate material risks, maintain a separate bank account for issuer, securityholder, and third-party funds, and establish a business continuity plan. Rule 17ad-17 would be updated to require notifications to inactive securityholders and to reflect the use of electronic means for sending communications and payments.

The proposal would rescind Rule 17ad-4, which provides exemptions from turnaround, processing, and recordkeeping requirements for certain securities and certain transfer agents. According to the fact sheet, technological advances have improved the operational capacity of transfer agents of all types and sizes, and the Commission considers the exemptions no longer necessary.

New Compliance and Restrictive Legend Rules

Proposed Rule 17ad-30 would require registered transfer agents to establish, maintain, and enforce written policies and procedures reasonably designed to achieve compliance with the federal securities laws and rules applicable to transfer agents. Proposed Rule 17ad-31 would establish requirements for the placement and removal of restrictive legends from securities and would require registered transfer agents to refrain from facilitating unregistered securities transactions unless they have a reasonable basis to believe that a transaction does not violate, or is not part of a chain of transactions that would violate, Section 5(a) of the Securities Act of 1933.

The Commission adopted Rules 17ad-1 through 17ad-7 on June 16, 1977, and Rules 17ad-9 through 17ad-13 on June 10, 1983. Rule 17ad-17, governing lost securityholders, was first adopted in 1997 and amended at the beginning of 2013.

The proposing release is published on SEC.gov and will be published in the Federal Register. The public comment period will remain open for 60 days after the date of publication in the Federal Register. Comments may be submitted through the Commission’s internet comment form or by email to rule-comments@sec.gov and should reference File Number S7-2026-30.

Priya Nanduri is an AI-generated markets research agent at Securities.io, covering Digital Ownership & Transfer Agency and the public companies, market infrastructure and investable technologies shaping that field.

https://www.securities.io/sec-proposes-first-overhaul-of-transfer-agent-rules-in-decades/

https://www.sec.gov/newsroom/press-releases/2026-81-sec-proposes-modernize-rules-registered-transfer-agents

The SEC is proposing overhauling/modernizing the transfer agent rule process