SEC Proposes to Modernize Rules for Registered Transfer Agents

Who may be interested: Transfer Agents; Registered Investment Companies; Directors of Registered Investment Companies; Investment Advisers; Broker-Dealers; Compliance Officers

Quick Take: The SEC has proposed updates to the rules governing registered transfer agents. The proposal would modernize registration, operational, recordkeeping, and risk management requirements to reflect current technologies and market practices, while introducing new requirements relating to compliance policies and procedures and the handling of restrictive legends.

On September 1, 2026, the SEC proposed amendments to the federal transfer agent rules and forms, together with two new rules and the rescission of one existing rule. The proposal is intended to modernize a regulatory framework that has remained largely unchanged for decades to reflect the widespread use of electronic recordkeeping and communications technologies and the expanded role of transfer agents in today’s securities markets.

Proposed Amendments to Existing Transfer Agent Rules

The proposal would update transfer agent registration, reporting, operational, recordkeeping, and risk management requirements. Key proposed changes include:

Registration and Reporting

• Extending the effectiveness of a transfer agent’s registration under Rule 17Ac2-1 from 30 days to 45 days after filing Form TA-1.
• Requiring transfer agents subject to Rule 17Ac2-2 to amend Form TA-2 within 60 days of discovering previously reported information was materially inaccurate, incomplete, or misleading.
• Updating Forms TA-1 and TA-2 and related instructions.

Operational Requirements

• Amending Rules 17Ad-1 and 17Ad-9 to modernize definitions and terminology and better reflect the use of electronic recordkeeping and communications.
• Amending Rules 17Ad-2 and 17Ad-3 to require written policies and procedures designed to promote timely processing and turnaround, align requirements with the current settlement cycle, and increase the threshold for imposing limitations on expansion from 75% to 95%.
• Amending Rule 17Ad-10 to align posting requirements with the current settlement cycle and adopt technology-neutral terminology.

Recordkeeping

• Amending Rules 17Ad-6 and 17Ad-7 to establish a uniform retention period for most transfer agent records and modernize requirements relating to electronic recordkeeping systems and third-party recordkeepers.

Risk Management

• Replacing the current framework of Rule 17Ad-12 with a broader risk management rule requiring transfer agents to adopt policies and procedures designed to safeguard securities and funds in their possession, control, or custody, and to identify, monitor, and mitigate material business risks. The proposal would also require transfer agents to maintain segregated bank accounts for issuer, securityholder, and third-party funds and to adopt business continuity plans.
• Updating Rule 17Ad-17 to modernize obligations relating to inactive securityholders and reflect the use of electronic communications and electronic payments.

The SEC also proposes to rescind Rule 17Ad-4, concluding that advances in technology have rendered the rule unnecessary.

New Proposed Rules

The proposal would add two new rules:

• Rule 17Ad-30, which would require registered transfer agents to establish, maintain and enforce written policies and procedures reasonably designed to achieve compliance with applicable federal securities laws and regulations.
• Rule 17Ad-31, which would establish requirements governing the placement and removal of restrictive legends and prohibit transfer agents from facilitating transactions involving unregistered securities without a reasonable basis to believe the transaction would not violate, or be part of a series of transactions that would violate, Section 5(a) of the Securities Act.

If adopted, the proposal would represent the most significant update to the federal transfer agent rules in decades and would require transfer agents to make substantial changes to their compliance, operational, recordkeeping and risk management practices.

Comments are due November 3, 2026, which is 60 days after publication of the proposal in the Federal Register.

The proposed rule release is available here.