During one of the panels at the U.S. Securities and Exchange Commission (SEC) roundtable on tokenization, incumbents were urged to avoid attempting to hamstring new technology players. Below is a summary of the key regulatory changes discussed. 1) Transfer agent modernization: While smart contracts handle transfers, participants believe a regulatory layer is still needed in the form of “tokenization agents” or “digital transfer agents” to help manage edge cases like wallet recovery, freezes, sanctions compliance, and complex corporate actions. 2) Blockchain as official record: Participants emphasized that permissionless public blockchains should be recognized as an official record of ownership. This would eliminate duplicative off-chain record keeping, streamline operations, and unlock efficiencies. 3) Broker-dealer framework: Several participants argued that tokenized securities with embedded transfer restrictions through smart contracts should meet the 15c3-3 possession and control requirements, making them eligible to be custodied and traded by broker-dealers without triggering the “three step process” (special purpose broker-dealer requirements). 4) Self-custody options: Panelists advocated that self-custody should be permitted when chosen by investors, noting it enables direct access to innovation, reduces intermediary fees, and supports user control without compromising regulatory oversight. 5) Stablecoin settlement: Participants argued that tokenized securities should be able to be settled using stablecoins, just as cash is used in traditional finance, “without imposing extra regulatory burdens simply because the payment rails are digital.” 6) Investment Company Act adaptations: Specific areas mentioned include Single book of record at transfer agency level; Access and disclosure requirements for investor communication documents; Many mutual funds are considering dual share classes – ETF shares. These funds could also potentially be tokenized; Forward pricing rule (Rule 22c-1) modifications if 24/7 trading is implemented 7) Interoperability guidelines: Participants suggested that while industry should lead interoperability efforts, the SEC could provide high-level guideposts or considerations about what interoperability should accomplish and what factors might undermine it, creating “a common set of principles” for dialogue. 8) Regulatory sandbox/pilot programs: There was strong support for formal regulatory sandbox or pilot programs to allow firms to use DLT for issuing, trading, and settling tokenized securities. Participants emphasized these should be practical rather than experimental, focused on directly informing new rules and legislation rather than just testing technology capabilities, which are already proven. 9) Global regulatory coordination: Several speakers highlighted the need for global policy maker coordination and collaboration since technology is cross-border, and regulatory regimes need to recognize tokenized assets as they move across jurisdictions. The panel emphasized that innovation in this space could bring significant efficiencies to capital markets while maintaining investor protections, but requires thoughtful regulatory adjustments to realize its full potential.