BSTX Files To Establish Securities Exchange
Boston Security Token Exchange, a joint venture of BOX Digital Markets and tZERO Group, 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.
Crypto-focused firms are expected to use their high valuations to buy TradFi firms.
The shared private ledger from Baton Systems enhances settlement speed and efficiency.
Customers can have accelerated treatment of financial transactions, exchange and storage of data.
Project Jura explored cross-border settlement of tokenised assets on a DLT platform.
Committee is holding a hearing on Understanding the Challenges and Benefits of Financial Innovation in the US.