SEC Proposal Could Simplify Legal Rules for Tokenized Stocks

The U.S. Securities and Exchange Commission has proposed updating decades-old transfer-agent rules to allow blockchain ledgers to serve as the official record of stock ownership. Currently, tokenized stocks rely on two separate records the onchain ledger and a traditional offchain shareholder file with the offchain version treated as legally binding, even when blockchain data is more current.

Why the Change Matters

If approved, companies could eliminate duplicate recordkeeping and reduce reconciliation errors between the two systems. Legal experts note this could also prevent confusion during bankruptcy or insolvency cases, where mismatched records currently create complications.

Transfer Agents Still Face Compliance Duties

The proposal does not remove existing ownership restrictions or identity verification requirements. Firms managing tokenized securities would still need to handle shareholder deaths, inheritance claims, mailing notices, and record corrections. Physical processes, such as handling mailed documents, would see faster turnaround times under the new rules, dropping from several days to just one.

Industry professionals expect increased compliance responsibilities for firms choosing to maintain official ownership records themselves. The SEC has opened a 60-day public comment period on the proposal.