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lotter on DSK11XQN23PROD with NOTICES2

Federal Register / Vol. 86, No. 168 / Thursday, September 2, 2021 / Notices BSTXs Participants trading activity on BSTX. Participant Proprietary Data would only be available to the BSTX
Participant from which such data derived. That is, a BSTX Participant would not have access to the Participant Proprietary Data of another BSTX
Participant, nor would any non-BSTX
Participant provided access to the Market Data Blockchain have access to Participant Proprietary Data. As a result, no BSTX Participant or non-BSTX
Participant would be provided with access to trading information of another BSTX Participant in a manner that would allow for reverse engineering of trading strategies or otherwise compromise the confidential nature of each BSTX Participants trading information. Through the API, a BSTX
Participant can run searches of its previous order and trading activity. The Participant Proprietary Data would be visible to the BSTX Participant to which it corresponds in sequential order of when each action occurred, though the BSTX Participant would have the ability to filter the different information fields or run searches for particular items e.g., only showing cancel orders or only showing activity in a particular symbol.
General Market Data is the second type of information that would be available on the BSTX Market Data Blockchain, which would consist of:
1 All displayed orders,41
modifications, cancellations, and executions occurring on BSTX in an anonymized format.
2 Administrative data and other information from the Exchange e.g., trading halts, or technical messages.
General Market Data would allow viewers to be able to observe the historical orders, executions, and other events e.g., cancellations received by and occurring on BSTX. Similar to the format and presentation of Participant Proprietary Data, the General Market Data would generally be visible in sequential order of when each action occurred, though viewers would have the ability to filter the different information fields or run searches for particular items e.g., only showing cancel orders or only showing activity in a particular symbol. The Exchange notes that the General Market Data that would be available on the BSTX Market Data Blockchain would contain substantively similar information as would be available through the Exchanges proprietary market data feeds, so access to the BSTX Market Data Blockchain would not provide 41 The Exchange notes that it is not proposing any non-displayed or hidden order functionality for BSTX.

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substantive information that is not otherwise available through the Exchanges proprietary market data feeds.42 In other words, accessing General Market Data on the BSTX
Market Data Blockchain would not provide any informational advantage over proprietary market data that could be used to make trading decisions in real time. The Exchange believes that this is particularly true given that market data both Participant Proprietary Data and General Market Data will be posted to the BSTX Market Data Blockchain on a delay of at least five minutes, as discussed further below. Similar to Participant Proprietary Data, persons accessing the General Market Data through the Exchangeprovided API could run configurable searches of the available information.
General Market Data would be anonymized, meaning that a BSTX
Participant would not be able to determine the identity of another BSTX
Participants orders, quotes, cancellations, or other messages. For the avoidance of doubt, the alphanumeric address assigned to each BSTX
Participant to facilitate the BSTX Market Data Blockchain would not be visible as part of General Market Data.43 As a result, there should not be cause for concern regarding potential trading information leakage or the ability to reverse engineer another BSTX
Participants trading strategies given the anonymous nature of General Market Data. BSTX Participants and any nonBSTX Participant provided access to 42 General Market Data would differ from the Exchanges proprietary market data feed in that the proprietary market data feed provides real time snapshots of the order book, including depth of book quotations and the quantity of shares available at each price point. In contrast, General Market Data would generally show sequential events occurring on the Exchange for each symbol e.g., order posted to order book, then the order is executed in part, then the remaining amount of the order executed, then a new order posts to the order book etc.. In addition, proprietary market data generally does not show each individual newly posted order or cancellation of a resting order, but rather shows subscribers an updated snapshot that increases or decreases the available quantity at a given price point as new orders come in and modifications or executions of existing orders occur. In contrast, General Market Data available on the Market Data Blockchain would show viewers, in an anonymized format, the sequential entry of each order, modification, or cancellation in the order book in each symbol as historical order and transaction information rather than real time snap shots. In this respect, General Market Data is more akin to a historical market data product like TAQ data, except that it pertains only to activity occurring on BSTX rather than the entire market.
43 For example, in looking at General Market Data, BSTX Participant X would not be able to determine by name, address, or otherwise that a particular order, modification to an existing order, or executed transaction involved BSTX Participant Y or any other BSTX Participant.

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General Market Data by the Exchange would generally have available to them via the BSTX Market Data Blockchain the same information they would have today with respect to other BSTX
Participants trading activity in subscribing to proprietary data feeds of other exchanges.
The Exchange proposes to append timestamps to the information made available. Timestamps related to all information on the BSTX Market Data Blockchain would indicate the time to the microsecond at which an order posted to the BSTX Book or that the BSTX System took other action with respect to an order e.g., effects a cancellation, execution, modification.
As noted above, information would be posted to the BSTX Market Data Blockchain on a delayed basis of at least five minutes.44 As a result, the BSTX
Market Data Blockchain would not function as a substitute for real-time market data, and, accordingly the Exchange does not believe that market participants with access to the delayed market data available on the BSTX
Market Data Blockchain would have any real time trading advantage over participants that continue to use realtime market data to make trading decisions.45 A BSTX Participant would 44 The practical purpose behind this five minute delay is for the Exchange to accrue sufficient data and information to record to the BSTX Market Data Blockchain. As the name blockchain suggests, data is recorded onto a ledger in discrete blocks that are chained together at different intervals. The Exchange could record information to the BSTX
Market Data Blockchain over a shorter time interval in much smaller blocks, each of which would contain less data than a longer interval and a larger block. However, as proposed, the Exchange would only record information to the BSTX Market Data Blockchain after at least five minutes, and each block would contain the market data and information that had accrued over the preceding five minutes on a rolling basis. Accordingly, a viewer of the BSTX Market Data Blockchain would be able to see the preceding five minutes of market data as detailed above after each five-minute interval. The Exchange believes that a five minute interval is appropriate to allow the Exchange to operate the BSTX Market Data Blockchain efficiently i.e., sufficient market data will have accrued over five minutes to publish an update to the blockchain and to ensure that the BSTX Market Data Blockchain does not provide a real-time trading advantage over consumers of consolidated market data or proprietary market databoth of which are disseminated on sub-second, or submillisecond, timescales. See e.g., Exchange Act Release No. 90610, 86 FR 18596, 18603 Apr. 9, 2021 Today, markets rely on highly sophisticated electronic trading systems that can consume many points of data at speeds measured in sub-second increments.; see also id. at n.679 noting that even the consolidated securities information processors 99th percentile of quote latency are today below 100 microseconds.
45 According to data available on the Commissions market structure website, even small capitalization stocks and exchange traded products generally have quote lifetimes of much shorter
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