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Federal Register / Vol. 86, No. 168 / Thursday, September 2, 2021 / Notices
SECURITIES AND EXCHANGE
COMMISSION
Release No. 3492796; File No. SRBOX
202106

Self-Regulatory Organizations; BOX
Exchange LLC; Notice of Filing of Amendment No. 1 and Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change, as Modified by Amendment No. 1, To Adopt Rules Governing the Trading of Equity Securities on the Exchange Through a Facility of the Exchange Known as the Boston Security Token Exchange LLC
August 27, 2021.

On May 12, 2021, BOX Exchange LLC
Exchange or BOX filed with the Securities and Exchange Commission Commission, pursuant to Section 19b1 of the Securities Exchange Act of 1934 Act 1 and Rule 19b4
thereunder,2 a proposed rule change to adopt rules governing the listing and trading of equity securities that would be NMS stocks on the Exchange through a facility of the Exchange known as the Boston Security Token Exchange LLC
BSTX. The proposed rule change was published for comment in the Federal Register on June 2, 2021.3 On July 13, 2021, pursuant to Section 19b2 of the Act,4 the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change.5 On August 18, 2021, the Exchange filed Amendment No. 1 to the proposed rule change, which replaced and superseded the proposed rule change as originally filed.6 The 1 15

U.S.C. 78sb1.
CFR 240.19b4.
3 See Securities Exchange Act Release No. 92017
May 25, 2021, 86 FR 29634 Notice. Comments on the proposed rule change can be found at:
https www.sec.gov/comments/sr-box-2021-06/
srbox202106.htm.
4 15 U.S.C. 78sb2.
5 See Securities Exchange Act Release No. 92387
July 13, 2021, 86 FR 38140 July 19, 2021. The Commission designated August 31, 2021 as the date by which the Commission shall approve or disapprove, or institute proceedings to determine whether to approve or disapprove, the proposed rule change.
6 In Amendment No. 1, the Exchange revised the proposal to: i Eliminate the proposed suspension of unlisted trading privileges for thinly traded securities; ii modify proposed rule text regarding the order parameter that would allow participants to indicate a preference for same day T+0 or next day T+1 settlement to clarify that, based on how the preferences of the two sides of an executed trade compare, the Exchange will transmit matched order information to a registered clearing agency for settlement as indicated to the extent that such settlement timing may be permitted under the
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Commission is publishing this notice and order to solicit comments on the proposed rule change, as modified by Amendment No. 1, from interested persons, and to institute proceedings pursuant to Section 19b2B of the Act 7 to determine whether to approve or disapprove the proposed rule change, as modified by Amendment No. 1.
I. The Exchanges Description of the Proposed Rule Change, as Modified by Amendment No. 1
Pursuant to the provisions of Section 19b1 of the Securities Exchange Act of 1934 as amended Exchange Act,8
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 proposed rule change, such as the application to become a BSTX
rules, policies, and procedures of the registered clearing agency; iii modify aspects of the proposed market data blockchain to remove the Exchanges ability to change the content of the market data blockchain through a regulatory circular, remove the unique identification number from the types of member-specific market data, specify that anonymized, general market data will pertain to displayed orders, and add that the Exchange may provide permission for non-members to view the anonymized, general market data; iv add rule text regarding the Exchanges proposed market data products; v eliminate a proposed rule regarding issuer conversion of a security to listing on BSTX;
vi provide additional description of several aspects of the proposal, including the market data blockchain and the possibility to settle on a T+0 or T+1 basis; and vii make technical and conforming changes. Amendment No. 1 is available on the Commissions website at: https www.sec.gov/
comments/sr-box-2021-06/srbox202106-9159349247726.pdf.
7 15 U.S.C. 78sb2B.
8 15 U.S.C. 78sb1.

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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.9
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.
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 under the proposed rules. The 9 The Exchanges Rules can be found on the Exchanges public website: https boxoptions.com/
regulatory/rulebook-filings/.

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