Recommendations call for verified record portability, risk-based reconciliation, long-term ownership preservation and technology-neutral controls

 

NEW YORK, NY – November 3, 2026 – [KOREWIRE] – KoreInside, KoreTransfer USA LLC (“KoreTransfer”) and KoreChain Inc. (“KoreChain”) today announced the submission of a joint comment letter to the U.S. Securities and Exchange Commission supporting the modernization of federal rules governing registered transfer agents.

The letter responds to the SEC’s proposed Transfer Agent Rules under Release No. 34-106246 and File No. S7-2026-30. The organizations support a technology-neutral framework that strengthens investor protection through reliable digital ownership records, secure transfer-agent succession, effective transaction controls and verifiable record preservation.

“Modernizing transfer-agent regulation is not simply about replacing paper with digital records,” said Oscar A. Jofre, Co-founder, President and Chief Executive Officer of KoreInside. “It is about ensuring that securities ownership can be understood, verified and reconstructed throughout the life of an issuer. A current cap table tells us who is recorded today. The infrastructure must also preserve how those positions were issued, transferred, restricted, corrected and authorized.”

Six Recommendations for Modern Ownership Infrastructure

The joint letter recommends that the SEC establish portable and verifiable record-handoff requirements for master securityholder files, control books, transfer journals, restrictions and material historical records.

It also recommends risk-based validation of inherited ownership records, with discrepancies investigated, escalated and documented without unnecessarily suspending unaffected shareholder rights.

For legally consequential ownership evidence, the letter recommends retention throughout the issuer’s legal existence and for at least ten years after dissolution or completion of winding up, whichever occurs later, subject to legal holds.

The organizations further recommend demonstrable protection against alteration, destruction and unrecoverable loss through independently controlled recovery copies and tamper-evident histories without mandating a particular database, WORM system, blockchain or vendor.

The letter calls for preserving the source, date, scope, reviewing party, outcome and limitations of available identity and compliance evidence without imposing blanket retroactive KYC requirements.

Finally, it recommends that the registered recordkeeping transfer agent maintain exclusive control over the authoritative master securityholder file, including where supporting records reside in linked systems or distributed ledgers.

Transfer-Agent Succession Requires More Than File Delivery

The SEC proposal includes a fifteen-calendar-day record-handoff requirement under proposed Rule 17ad-7(i). KoreInside, KoreTransfer and KoreChain support timely handoffs but emphasize that delivery alone does not prove that inherited records are complete, accurate, or capable of being safely relied upon.

The comment letter recommends minimum machine-readable deliverables, including current positions by class and series, issuance and cancellation histories, transfer journals, control books, corporate actions, restrictions, stop orders, adverse claims, source authorizations, corrections, known omissions and an integrity manifest identifying the effective date, coverage and provenance of the records.

A successor transfer agent should preserve the original received snapshot and perform risk-based reconciliation. This should include comparing securityholder positions with issued and outstanding amounts, reviewing authorized securities, tracing material transfers and corporate actions and identifying duplicates, missing records, unexplained changes and inherited restrictions.

“Portability without provenance can move a problem from one system to another,” Jofre said. “A successor must be able to determine what was received, where it came from, what it covers, what is missing and which discrepancies require review. That is how investor rights are protected during a transfer-agent transition.”

Protecting Ownership Records Across the Issuer Lifecycle

The comment letter states that a general six-year minimum should not become the endpoint for core ownership evidence.

Historical issuances, inheritance, corporate actions, litigation, disputed transfers and ownership claims may require records from far earlier periods. A current balance cannot, by itself, establish how ownership arose.

The organizations recommend preserving the master securityholder file and historical versions, control book, transfer journal, issuance and cancellation records, material authorizations, restrictions, corporate actions and corrective entries throughout the issuer’s legal existence and for at least ten years following dissolution or winding up.

The recommendation is designed as an issuer-centered custody obligation. When an issuer changes transfer agents, documented transfer, acceptance and archival-custodian arrangements should preserve continuity without requiring every predecessor to maintain duplicate complete archives indefinitely.

Independent and Verifiable Electronic Evidence

The organizations support electronic recordkeeping standards based on integrity, accessibility, reproducibility, redundancy, continuity, and auditability.

A defense-in-depth architecture may combine an operational database, independently administered WORM or comparable tamper-resistant storage and an append-only or permissioned distributed ledger containing cryptographic commitments. These are examples rather than mandated technologies.

“Three copies do not automatically prove that a record is accurate, and a cryptographic hash does not validate the truth of the source information,” said Dr. Kiran Garimella, Co-founder, Chief Scientist and Chief Technology Officer of KoreInside. “Strong infrastructure combines authorization, provenance, tamper-evident history, independent recovery, reconciliation and accountable review. The objective is verifiable evidence, not technology for its own sake.”

The letter recommends documented corrections rather than silent deletion, recovery testing, signed manifests, reproducible exports and clear linkage between material ownership changes and supporting authority. Transfer agents should retain timely access to required records even where infrastructure is hosted or supported by third parties.

KoreTransfer Remains the Authority

The comment letter supports the use of securely linked systems, including distributed ledgers, provided the registered recordkeeping transfer agent retains exclusive control over legally effective changes to the master securityholder file.

Wallet registries, ledgers, smart contracts and token systems should not independently alter the authoritative ownership record without required authorization. External token events should reconcile with the control book and transfer journal, and authorized supply limits and applicable restrictions must be enforced.

KoreChain can strengthen auditability, sequencing and data integrity by providing distributed-ledger and immutable-evidence capabilities. It does not replace KoreTransfer or transfer KoreTransfer’s legal and regulatory responsibilities to a blockchain, smart contract, issuer, investor, wallet operator or technology provider.

The letter also cautions that a previously verified wallet or whitelist entry is not permanent proof of transaction eligibility. Systems should support updated, transaction-specific review where required by law, while sensitive personal information should not be placed on publicly accessible blockchains.

Compliance Evidence Without Blanket Retroactive KYC

The organizations recommend preserving the provenance of prior identity and compliance reviews, including the source, date, scope, reviewing intermediary, outcome, and known limitations of the available evidence.

A cap table establishes recorded positions. It does not necessarily prove that every holder was verified for every purpose or remains eligible for a proposed transfer.

The comment letter supports risk-based, transaction-specific review where appropriate while cautioning against assigning transfer agents obligations that properly belong to broker-dealers, funding portals, banks or other regulated intermediaries.

Processing, Restrictive Securities and Investor Communications

KoreInside, KoreTransfer and KoreChain support faster routine processing, reliable electronic receipt and prompt actionable deficiency notices.

The letter recommends measuring receipt when an item reaches a transfer-agent-controlled channel, preserving the routine or non-routine classification and rationale, and maintaining the complete record of deficiencies, notices, resubmissions, approvals and final disposition.

For restrictive legends, original issuances and other transactions implicating Securities Act Section 5, the letter supports electronic evidence packages linking the applicable exemption, relevant facts, issuer instructions, legal opinions or documented transfer-agent determinations, red flags, approvals and final disposition.

The letter also recommends distinguishing authenticated securityholder activity from email-open tracking. Automated security scanners may trigger open indicators without meaningful investor engagement, creating a risk of incorrect inactive-holder or unclaimed-property decisions.

Machine-Readable Reporting and Practical Implementation

The organizations recommend clear machine-readable Form TA-1 and Form TA-2 specifications, validation rules, testing opportunities, and phased implementation.

They also encourage interoperable data definitions for issuances, transfers, cancellations, restrictions, corporate actions and corrections. These standards should support secure exchange among transfer agents, issuers, intermediaries and service providers without mandating a single technology, blockchain, messaging protocol or vendor.

“The private capital markets cannot scale responsibly without ownership infrastructure that is portable, verifiable and accountable,” Jofre added. “The SEC’s proposal is an important opportunity to build a framework that protects investors while allowing technology to continue evolving.”

The full comment letter was submitted under File No. S7-2026-30. Read the full comment letter.

About KoreInside

KoreInside is a global capital markets infrastructure company providing blockchain technology, digital securities solutions, identity management, compliance automation, transfer agency services, and regulatory technology for private capital markets. Through its ecosystem, including KoreChain, KoreOracle, KoreID, Compliance Desk, and KoreTransfer, KoreInside enables the compliant digitization, issuance, management, and transfer of securities across global markets.

For more information, visit www.koreinside.com

KoreTransfer USA LLC is a registered transfer agent providing transfer-agent services and maintaining securities ownership records for issuers and their securityholders. KoreTransfer operates through controlled digital infrastructure designed to support accurate ownership records, issuances, transfers, compliance, reporting, distributions, corporate actions, and securityholder services.  www.koretransfer.com

About KoreChain Inc.

KoreChain Inc. provides distributed-ledger and immutable-evidence infrastructure supporting auditability, data integrity, and controlled securities lifecycle management. KoreChain is designed to operate as part of regulated market infrastructure and does not replace the authority or regulatory responsibilities of a registered transfer agent.  www.korechain.io

Media Contact

KoreInside

Email: danielle@kore.inc

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Website:  https://koretransfer.com

Website:  https://korechain.io