TL;DR:

  • Formal request: The Digital Chamber submitted a formal comment letter to the U.S. Securities and Exchange Commission (SEC) outlining eight recommendations to adapt transfer agent rules to distributed networks.
  • Registry control: The association requested that on-chain ledgers be permitted to constitute the official master securityholder file without requiring mandatory off-chain duplicates.
  • Opposition to regulatory gatekeeping: The trade group opposed the proposal requiring transfer agents to proactively determine whether certain transactions violate Section 5 of the Securities Act of 1933.

The Digital Chamber has formally requested that the SEC provide greater technical flexibility for managing tokenized securities under federal regulations governing transfer agents. The petition was submitted to the regulator on November 3 via a comment letter drafted with counsel from the law firm Morrison & Foerster LLP.

1/ The SEC is taking an important step toward modernizing transfer agent rules. The details matter. Yesterday, we submitted our comment letter on @SECGov’s proposed transfer agent rules. Here’s what we recommended 🧵 pic.twitter.com/NJA4ec0zma

— The Digital Chamber (@DigitalChamber) November 4, 2026

The statement comes in response to the regulatory proposal issued by the agency in September under Release No. 34-106246. The proposal addresses guidelines for maintaining the master securityholder file (MSF) and the operational custody of electronic records. According to documentation submitted by the trade association, the current framework risks favoring traditional database models over decentralized networks.

The Digital Chamber represents more than 250 companies across the digital finance and technology sectors. Its report details eight specific recommendations designed to prevent operational bottlenecks in institutional adoption of distributed ledgers.

One central point centers on the definition of “exclusive control” over the master file. The SEC proposal requires a transfer agent to maintain exclusive possession and control of the record. According to the Digital Chamber’s filing, this requirement should be construed in terms of legal authority and data governance procedures, rather than physical ownership or direct control over validator and node infrastructure on a public network. The organization argues that this clarification would allow agents to utilize open or permissioned public networks without needing to administer the underlying consensus mechanisms.

The Digital Chamber submitted eight recommendations to the SEC

Proposed Hybrid Models and Multiple Transfer Agents

The association also put forward the viability of hybrid recordkeeping systems. Under these structures, wallet addresses, token balances, and transaction histories reside on the blockchain, while sensitive personal and tax data remain stored on linked off-chain servers. According to the group’s analysis, this design removes the need to maintain duplicate off-chain records simply because a distributed ledger is utilized.

The SEC proposal dictates that only a single registered transfer agent may maintain an issuance’s master file. In response, The Digital Chamber urged the Commission to allow multi-agent arrangements. According to the association, an offering could function under a lead agent and co-transfer agent model, where one entity coordinates positions on traditional books while another oversees tokenized portions. Furthermore, the letter requests recognition of co-equal agent arrangements when distinct tranches of an issue are deployed across different blockchain networks.

The trade group voiced strong opposition to the inclusion of proposed Rule 17Ad-31(b). That provision would bar agents from processing unregistered transactions unless they establish a “reasonable basis” to believe the transfer complies with Section 5 of the Securities Act of 1933.

Industry data cited in the submission indicates that transfer agents lack visibility into the comprehensive background of every prior transaction. The organization cautioned that imposing such gatekeeping obligations would introduce delays and drive up operational costs, particularly for automated on-chain settlements. As an alternative, they proposed limiting liability to an “actual knowledge” standard, under which an agent would only be expected to halt a transaction if it has explicit, direct knowledge of a legal violation.

Finally, the letter urges the SEC to replace mandatory physical mailing address requirements with verified electronic contact methods and to revise Form TA-2 to eliminate regulatory biases favoring centralized, private legacy databases.

This debate follows the SEC’s approval in September 2026 of a five-year exemptive relief order permitting public network trading of tokenized equities. The public comment period on the transfer agent rulemaking is ongoing as the Commission reviews submitted arguments ahead of a final vote on the definitive rule.