SEC proposes transfer agent rule, sets event to figure out round-the-clock U.S. trading

The U.S. Securities and Exchange Commission is pursuing two efforts that could be significant for the crypto sector, making separate announcements Tuesday that it's decided the agenda and participants for its upcoming roundtable on 24-hour trading and proposed a rule redefining transfer agents to include the rise of blockchain technology.

The Sept. 17 roundtable at the SEC's Washington headquarters will bring together major securities names, including those who provide the financial infrastructure. The list includes NYSE, Nasdaq, State Street, Citadel Securities, Cboe and DTCC, plus more recent entrants such as Robinhood.

While the crypto industry was born into a technology that never closes, round-the-clock trading would be a profound step for the rest of the markets, and crypto broker-dealers could be subjected to rules that arise from this project. The panels will discuss how to approach overnight surveillance, closing-price practices and the clearing and settling of trades, plus some of the mechanics of such an endeavor, including how maintenance works on a continuous system.

Earlier on Tuesday, the regulator also proposed a new transfer-agent rule that is meant to adjust that role to include blockchain technology and other innovations. Transfer agents are firms that keep track of the changing ownership of securities — a role that has been shaken by the onset of onchain transactions that happen instantly and openly, especially as the markets embrace the rise of tokenized securities.

The proposed rule, which is open for a 60-day comment period, would modernize a rule last changed decades ago, "including the use of electronic communications and blockchain technology in connection with securities offerings and the transfer of shares,” SEC Chairman Paul Atkins said in a statement.

It would allow the use of blockchains as official records of transactions, though it also comes with some new controls on the firms' operations, including in areas such as cybersecurity.

SEC Commissioner Hester Peirce, in a Tuesday statement, amplified a question that will be central to the crypto sector's interest in the rule: "Should transfer agents continue to be required 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?"

Crypto platform Bullish, the parent company of CoinDesk, recently acquired transfer agent Equiniti in a $4.2 billion deal.