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Federal Register / Vol. 86, No. 104 / Wednesday, June 2, 2021 / Notices
SECURITIES AND EXCHANGE
COMMISSION
Release No. 3492017; File No. SRBOX
202106

Self-Regulatory Organizations; BOX
Exchange LLC; Notice of Filing of Proposed Rule Change To Adopt Rules Governing the Trading of Equity Securities on the Exchange Through a Facility of the Exchange Known as Boston Security Token Exchange LLC
May 25, 2021.

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Pursuant to Section 19b1 of the Securities Exchange Act of 1934
Act,1 and Rule 19b4 thereunder,2
notice is hereby given that on May 12, 2021, BOX Exchange LLC the Exchange filed with the Securities and Exchange Commission Commission the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule from interested persons.
I. Self-Regulatory Organizations Statement of the Terms of Substance of the Proposed Rule Change Pursuant to the provisions of Section 19b1 of the Securities Exchange Act of 1934 as amended Exchange Act,3
BOX Exchange LLC BOX or the Exchange is filing with the Securities and Exchange Commission SEC or Commission a proposed rule change to adopt rules to govern the trading of equity securities on the Exchange through a facility of the Exchange known as Boston Security Token Exchange LLC BSTX. As described more fully below, BSTX would operate a fully automated, price/time priority execution system for the trading of Securities, which would be equity securities that meet BSTX listing standards and for which certain information regarding orders and executions on BSTX would be recorded and disseminated on a proprietary market data feed that BSTX operates using a proprietary blockchain system BSTX Market Data Blockchain. The proposed additions to the Exchanges Rules setting forth new Rule Series 1700029000 have been submitted with the proposal as Exhibit 5A. All text set forth in Exhibit 5A would be added to the Exchanges rules and therefore underlining of the text is omitted to improve readability. Forms proposed to be used in connection with the 1 15

U.S.C. 78sb1.
CFR 240.19b4.
3 15 U.S.C. 78sb1.

18:31 Jun 01, 2021

II. Self-Regulatory Organizations Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below.
The self-regulatory organization has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organizations Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange is proposing to adopt a series of rules to govern the trading of certain equity securities through a facility of the Exchange known as BSTX
and make certain amendments to the existing BOX rules to facilitate trading on BSTX. As described more fully below, BSTX would operate a fully automated, price/time priority execution system BSTX System for the trading of certain equity securities that would be considered Securities 4 The Exchanges Rules can be found on the Exchanges public website: https boxoptions.com/
regulatory/rulebook-filings/.

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VerDate Sep<11>2014

proposed rule change, such as the application to become a BSTX
Participant, have been submitted with the proposal as Exhibits 3A through 3L.
In addition, the Exchange proposes to make certain amendments to several existing BOX Rules to facilitate trading on BSTX. The proposed changes to the existing BOX Rules would not change the core purpose of the subject Rules or the functionality of other BOX trading systems and facilities. Specifically, the Exchange is seeking to amend BOX
Rules 100, 2020, 2060, 3180, 7130, 7150, 7230, 7245, IM80503, 11010, 11030
and 12140. These proposed changes are set forth in Exhibit 5B. Material proposed to be added to the Rule as currently in effect is underlined and material proposed to be deleted is bracketed.
All capitalized terms not defined herein have the same meaning as set forth in the Exchanges Rules.4
The text of the proposed rule change is available from the principal office of the Exchange, at the Commissions Public Reference Room and also on the Exchanges internet website at http
boxoptions.com.

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under the proposed rules. The Securities 5 under the proposed rules would be equity securities that meet BSTX listing standards and that trade on the BSTX System. The Exchange would operate the BSTX Market Data Blockchain, which would record certain information regarding orders and transactions occurring on BSTX with respect to Securities. All BOX
Participants would be eligible to participate in BSTX provided that they become a BSTX Participant pursuant to the proposed rules. Under the proposed rules, BSTX would serve as the listing market for eligible companies and issuers of exchange traded products ETPs that wish to issue their registered securities as Securities.
Securities would trade as NMS stock.6
The Exchange is not proposing rules that would support its extension of unlisted trading privileges UTP to other NMS stock, and accordingly the Exchange does not intend to extend any such UTP in connection with this proposal. The Exchange would therefore only trade Securities listed on BSTX
unless and until it proposes and receives Commission approval for rules that would support trading in other types of securities, including through any extension of UTP to other NMS
stock. A guide to the structure of the proposed rule change is described immediately below.
Guide to the Scope of the Proposed Rule Change The proposal for trading of Securities through BSTX generally involves changes to existing BOX Rules and new BOX Rules pertaining specifically to BSTX BSTX Rules. In addition, the Exchange plans to submit a separate proposed rule change pertaining to BSTXs corporate governance documents. To support the trading of Securities through BSTX, certain conforming changes are proposed to existing BOX Rules and entirely new BSTX Rules are also proposed as Rule Series 17000 through 29000.7 Each of those new Rule Series and the provisions thereunder are described in greater detail below. Where the BSTX
Rules are based on existing rules of another national securities exchange, the source rule from the relevant exchange is noted along with a 5 As discussed further below, BSTX proposes to use the term Security to refer to BSTX-listed securities to distinguish them from other securities issued by an issuer that the issuer does not list on BSTX.
6 17 CFR 242.600b48.
7 The proposed changes to BOX Rules and the proposed BSTX Rules have been submitted with this proposal as Exhibits 5B and 5A, respectively.

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