The US Securities and Exchange Commission (SEC) proposed new transfer agent rules on Tuesday. A blockchain could become the official record of who owns a share.
The same day, the Commodity Futures Trading Commission (CFTC) settled with a swaps trader. He had erased messages regulators ordered him to keep. Both actions turn on what counts as an official record.
Stock Records On-Chain Depend on One Obscure Firm
Transfer agents sit behind every public company share. They keep the master securityholder file, which is the issuer’s legal list of who owns what; they also route dividends and process transfers.
Washington has not rewritten those rules since the early 1980s, but Tuesday’s package amends existing rules and forms, rescinds one rule, and adds several new ones. Commissioner Hester Peirce said on X (twitter) that the proposal took more than a decade.
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Chairman Paul Atkins tied the update to technology the industry already uses.
“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,” read an excerpt in the announcement, citing Atkins.
That line decides whether a token is a share or a wrapper around one. A transfer only carries legal weight when the chain feeds the official file. Meanwhile the tokenization ownership gap has widened while the rules stood still.
Securitize, Computershare, and Equiniti have already moved for the work, BeInCrypto’s transfer agent guide explains. Registrars would also disclose which securities they tokenize and which networks host them.
A $90,000 Penalty for Messages That Vanished
Elsewhere, the CFTC closed the opposite kind of case. A federal court in Manhattan entered a consent order against John Patrick Gorman III. He is a US dollar swaps trader and a managing director at a global investment bank.
Enforcement staff told Gorman in March 2019 to preserve documents. He deleted WhatsApp threads and one text message instead.
Two months on, he wrote to the agency claiming he had destroyed nothing. He repeated that account under testimony in November 2019.
“Attempts to impede or obstruct the Commission’s investigations go to the very heart of the division’s ability to detect wrongdoing and enforce the law,” the CFTC said in its release, citing David Miller, the agency’s enforcement director.
The order fines Gorman $90,000 and permanently bars him from repeating the conduct. Regulators still rely on what a trader chooses to keep, which is the weakness a shared ledger removes.
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