Boston Security Token Exchange LLC (BSTX), a joint venture of BOX Digital Markets LLC and tZERO Group, Inc., announced that its updated proposed rulebook establishing itself as a securities exchange has been published by the Securities and Exchange Commission (SEC) and is open for public comment. With its innovations, BSTX’s proposed exchange offers potentially faster settlement, proprietary market data transmitted via blockchain, and better market quality for early stage companies that are thinly-traded.
“This updated proposal sets out a framework for a new exchange that we believe contains advances with major benefits for investors, exchange participants and small, early-stage companies, among others,” said Lisa J. Fall, CEO of BSTX. “We appreciate the thoughtful review of our rulebook by the SEC staff and also look forward to the public comments on this filing.”
In its filing, BSTX proposes an exchange that will benefit capital markets in three important ways:
- Faster Settlements. First, BSTX proposes to allow participants to elect accelerated settlement (i.e., T+0 or T+1) for securities listed on BSTX. BSTX’s approach is consistent with accelerated settlement capabilities currently supported by NSCC and DTC.
- Proprietary Data Feeds. Secondly, using a private, permissioned blockchain that it maintains and controls, BSTX will make available to exchange participants certain proprietary market data related to trading activity occurring on BSTX.
- Innovations for Thinly-traded Securities. Lastly, in response to the SEC’s ongoing search for innovative solutions to improve trading quality in thinly-traded securities, BSTX’s filing proposes suspending unlisted trading privileges (“UTP”) in securities that meet the proposed definition of a “thinly-traded security.” This change would concentrate liquidity for such securities in one national securities exchange, making market making in such securities more attractive, and simultaneously providing earlier stage companies with more market liquidity and a broader pool of public investors.
In June 2018, BOX Digital Markets LLC (BOX Digital) and tZERO Group, Inc. (tZERO) announced the BSTX joint venture to become the world’s first regulated exchange for trading security tokens. BOX Digital provides executive leadership and regulatory expertise, while tZERO manages ongoing technology implementation, administration, maintenance and support. BOX Exchange LLC (BOX Exchange), a national securities exchange registered with the SEC under Section 6 of the Securities Exchange Act of 1934, will operate and regulate BSTX as a facility of BOX Exchange. For more information on BSTX, visit: http://bstx.com.
About BOX Digital
BOX Digital Markets LLC is engaged in creating and developing markets for trading digital assets in a regulated environment. BOX Digital is a wholly-owned subsidiary of BOX Holdings Group LLC, which owns and operates BOX Options Market, an equity options marketplace and a facility of BOX Exchange LLC. BOX Exchange LLC is a Registered National Securities Exchange under Section 6 of the Securities Exchange Act of 1934.
tZERO Group, Inc. and its broker-dealer subsidiaries (tZERO) provide an innovative liquidity platform for private companies and assets. We offer institutional-grade solutions for issuers looking to digitize their capital table through blockchain technology, and trade on a regulated alternative trading system. tZERO democratizes access to private assets by providing a simple, automated, and efficient trading venue to broker-dealers, institutions, and investors. For more information on tZERO, please visit https://www.tzero.com/.
tZERO is not a registered broker-dealer, funding portal, underwriter, investment bank, investment adviser or investment manager, and is not providing brokerage, investment banking or underwriting services, recommendations or investment advice to any person, and does not provide any brokerage services. tZERO takes no part in the negotiation or execution of secondary market transactions for the purchase or sale of securities and at no time has possession of investor funds or securities in connection with such transactions.