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Federal Register / Vol. 86, No. 104 / Wednesday, June 2, 2021 / Notices
jbell on DSKJLSW7X2PROD with NOTICES2

sent to the Exchange through the FIX
gateway. The BSTX Market Data Blockchain, therefore, would be optional functionality available to all BSTX Participants on equal terms, and therefore is not unfairly discriminatory, consistent with Section 6b5 of the Exchange Act.337
The Exchange has proposed to make the BSTX Market Data Blockchain available only to BSTX Participants rather than other market participants that are not BSTX Participants primarily because the Exchange believes that BSTX Participants would be the most likely to be interested in potentially using the BSTX Market Data Blockchain. The BSTX Market Data Blockchain would consist of information that pertains solely to trading activity on BSTX and not other exchanges. The Exchange believes, therefore, that most persons interested in market data relating to trading on BSTX would likely become a BSTX
Participant, at which time they would have access to the BSTX Market Data Blockchain. The Exchange solicits comment from the public as to whether non-BSTX Participants would be interested in having access to the BSTX
Market Data Blockchain and the anticipated uses of the BSTX Market Data Blockchain by such non-BSTX
Participants.338 To the extent that nonBSTX Participants are interested in access to General Market Data i.e., anonymized market data available on the BSTX Market Data Blockchain, the Exchange would consider providing access to such persons on an ad hoc basis 339 or may consider amendments to the proposal or subsequent rule filings to provide regular access to General Market Data on the BSTX
Market Data Blockchain if there is sufficient interest or demand from nonBSTX Participants. The Exchange notes that the anonymized data that would be available on the BSTX Market Data Blockchain would be the same information that would be available through the Exchanges proprietary market data feeds, which any person i.e., both BSTX Participants and nonBSTX Participants would be able to acquire. Accordingly, under the proposal, non-BSTX Participants would still be able to access the same anonymized market data information 337 15

U.S.C. 78fb5.
Exchange reiterates that non-anonymized market data available on the BSTX Market Data Blockchain would only ever be accessible by the BSTX Participant who provided such market data through its trading on BSTX.
339 For example, the Exchange might provide temporary access to the BSTX Market Data Blockchain to academics studying equity markets.
338 The
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available on the BSTX Market Data Blockchain as BSTX Participants, but through a different means i.e., through the proprietary market data feeds rather than via the BSTX Market Data Blockchain. Because the same anonymized information would be available to non-BSTX Participants through another means, the Exchange believes that the proposed limitation of access to the BSTX Market Data Blockchain is not unfairly discriminatory and does not impose a burden on competition, consistent with Sections 6b5 and 6b8 of the Exchange Act.340
In addition, because the BSTX Market Data Blockchain only captures information with respect to trading activity on BSTX, it would have no effect or impact on other exchanges, promoting consistency with Section 6b8 of the Exchange Act, which prohibits an exchanges rules from imposing a burden on competition not necessary or appropriate in furtherance of the Exchange Act.341 The entry of an innovative competitor such as BSTX
seeking to implement a measured introduction of blockchain technology in connection with the trading of equity securities may promote competition by encouraging other market participants to find ways of using blockchain technology in connection with securities transactions. The proposed regulation of BSTX and BSTX
Participants, as well as the execution of Securities using a price-time priority model and the clearance and settlement of Securities pursuant to the rules, policies and procedures of a registered clearing agency will all operate in a manner substantially similar to existing equities exchanges. In this way, the Exchange believes that BSTX provides a robust regulatory structure that protects investors and the public interest while introducing the use of blockchain technology as an additional feature in connection with Securities traded on the Exchange.
In connection with the clearance and settlement of Securities pursuant to the rules, policies and procedures of a registered clearing agency, the Exchange proposes that BSTX Participants would be able to include in their orders in Securities that are submitted to BSTX
certain parameters to indicate a preference for settlement on a same day T+0 or next trading day T+1 basis when certain conditions are met.342 Any such orders would at the time of order entry represent orders that would be
regular-way and would be presumed to settle on a T+2 basis just like any other order submitted by a BSTX Participant that does not include a parameter indicating a preference for faster settlement. As described in greater detail above, however, an Order with a T+0 Preference or an Order with a T+1
Preference would only result in executions that would actually settle more quickly than on a T+2 basis if, and only if, all of the conditions in Rule 25060h are met and the execution that is transmitted to NSCC is eligible for T+0 or T+1 settlement under the rules, policies and procedures of a registered clearing agency.343 Any such preference included by a BSTX Participant would only become operative if the order happens to execute against another order from a BSTX Participant that also includes a parameter indicating a preference for settlement on a T+0 or T+1 basis.
The Exchange believes that the proposed ability for BSTX Participants to indicate a preference for shorter settlement times as described above is consistent with the Exchange Act and in particular Section 6b5 of the Exchange Act because it would help remove impediments to and perfect the mechanism of a free and open market and is not designed to permit unfair discrimination between or among market participants.344 Specifically, allowing for BSTX Participants to potentially reduce the settlement time for transactions on BSTX pursuant to the rules, policies and procedures of a registered clearing agency helps remove impediments to and perfects a free an open market by allowing greater choice for BSTX Participants who may want to avail themselves of currently available functionality at registered clearing agencies. Moreover, the Commission has previously noted a number of positive effects relating to the liquidity risks and costs faced by members in a clearing agency, and the Exchange believes that this proposed functionality on BSTX
would help realize such positive effects.345 Proposed Rule 25060h is not designed to permit unfair discrimination between market participants consistent with Section 6b5 346 because the Rule would allow all orders that are marketable against one anotherregardless of the settlement preference of the BSTX
Participant submitting the order or their customerto execute against each 343 See
proposed Rule 25100d.
U.S.C. 78fb5.
345 See supra notes 88891 and accompanying text.
346 15 U.S.C. 78fb5.
344 15

340 15

U.S.C. 78fb5 and 8.
U.S.C. 78fb8.
342 See proposed Rule 25060h.
341 15

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