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Federal Register / Vol. 86, No. 168 / Thursday, September 2, 2021 / Notices
understands that NSCC does already clear trades in accordance with this authority, and supporting data from The Depository Trust & Clearing Corporation DTCC regarding clearance and settlement activity on such shorter settlement cycles is provided in Section II.H. below.

There are broadly two types of blockchains: i Public blockchains that are decentralized, open to anyone running the same protocol; 37 and ii a private, permission-based blockchains where only those granted access may view or take other actions with respect to the blockchain.

The BSTX Market Data Blockchain
BSTX Market Data Blockchain As a Private Permissioned Network The BSTX Market Data Blockchain would operate as a private, permissionbased blockchain that would be accessible through an application program interface API available through the internet. The Exchange would control all aspects of the BSTX
Market Data Blockchain and the associated API. Pursuant to proposed Rule 17020b, each BSTX Participant would be assigned a BSTX Market Data Blockchain address that corresponds to the BSTX Participants trading activity on BSTX. The Exchange will also issue login credentials to each BSTX
Participant through which the BSTX
Participant may access the BSTX Market Data Blockchain through the API to see its order and transaction information on BSTX as well as certain anonymized market data from other BSTX
Participants, as discussed further below.
Similarly, the Exchange has the ability to issue login credentials to any nonBSTX Participant to allow access to the BSTX Market Data Blockchain through the API, but a non-BSTX Participant accessing the Market Data Blockchain would be limited to viewing only anonymized market data, as also explained below. BSTX Participants and any non-BSTX Participants to which the Market Data Blockchain is made available by the Exchange would only be able to access the information contained on the BSTX Market Data Blockchain through the API, and only the Exchange would have direct access to the underlying data on the private blockchain.
The BSTX Market Data Blockchain would generally operate by collecting information from two sources, which the Exchange would then translate into information capable of being recorded to the BSTX Market Data Blockchain.
Specifically, the data inputs for the BSTX Market Data Blockchain would come from i the BSTX System 38 to capture information such as executed transactions and ii each BSTX
Participants order/message information
BSTX will make available to BSTX
Participants certain market data related to trading activity occurring on BSTX
through the use of a private, permissioned blockchain maintained by the Exchange. As described further below, a BSTX Participant would have the ability to see through an online portal provided by the Exchange the market data information on the private blockchain consisting of detailed information about its trading activity on BSTX and anonymized information with respect to the trading activity of other BSTX Participants.34 BSTX
Participants would have no obligations with respect to providing information to, accessing, maintaining, or using the BSTX Market Data Blockchain. The Exchange believes that the information made available on the BSTX Market Data Blockchain would be generally similar to Daily Trade and Quote TAQ data made available by New York Stock Exchange LLC except that the Exchange would use distributed ledger or blockchain technology to record such information, a BSTX
Participant would be able to see nonanonymized information about its own trading activity on BSTX, and the market data would pertain only to trading activity on BSTX and not the broader market e.g., an over-the-counter OTC 35 transaction in a Security reported to the consolidated tape.36
Background on Blockchain Technology
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In general, a blockchain is essentially a ledger that can maintain digital records of assets, transactions, or other information. A blockchains central function is to encode transitions or changes to the ledger. Whenever one change to the blockchain ledger occurs to record a state transition, the entire blockchain is immutably changed to reflect the state transition.
otherwise expressly agreed to by the parties at the time of the transaction.
34 Additionally, as also explained below, nonBSTX Participants would have the ability to see the anonymized market data relating to trading on BSTX.
35 OTC in this context refers to trading occurring otherwise than on a national securities exchange.
36 See e.g., NYSE, Daily TAQ Fact Sheet, https
www.nyse.com/publicdocs/nyse/data/Daily_TAQ_
Fact_Sheet.pdf.

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37 A protocol in this context generally means a set of rules governing the format of messages that are exchanged between the participants.
38 The BSTX System refers to the automated trading system used by BSTX for the trading of Securities. See proposed Rule 17000a15.

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passing through the financial information exchange FIX gateway through which all orders and messages pass in order to connect to the BSTX
System.39 For example, if a BSTX
Participant sends an order to buy 100
shares of Security XYZ, when that order is sent to the Exchange, the Exchange would capture this information as it passes through the FIX gateway in an automated process that results in the BSTX Participant being able to see that order on the BSTX Market Data Blockchain through its login credentials once the information is recorded on the BSTX Market Data Blockchain.
The BSTX Market Data Blockchain does not require any affirmative action on the part of a BSTX Participant in order for its information to be recorded to the BSTX Market Data Blockchain.
Rather, the BSTX Market Data Blockchain captures trading activity that occurs on BSTX in the normal course and is made available to BSTX
Participants as an additional resource that they may choose to use in their discretion in the same general manner that a market participant might use TAQ
data.
Information Available on the BSTX
Market Data Blockchain As set forth in proposed Rule 17020c, there are two types of information that would be available on the BSTX Market Data Blockchain: i A
BSTX Participants own order and transaction information related to its trading activity on BSTX Participant Proprietary Data; and ii anonymized, general market data available to all BSTX Participants and non-BSTX
Participants permissioned by the Exchange General Market Data.40
With respect to Participant Proprietary Data, a BSTX Participant would be able to see the following information with respect to all orders and messages and executions submitted to and occurring on BSTX:
1 Symbol, side buy/sell, limit price, quantity, time-in-force 2 Order type e.g., limit order, ISO
3 Order capacity principal/agent 4 Short/long sale order marking 5 Message type e.g., order, modification, cancellation Participant Proprietary Data would effectively contain a record of all of a 39 The Exchange notes that the FIX Gateway and the BSTX System are the same sources of information from which information is taken to be provided as part of consolidated market data.
40 The Exchange notes that the BSTX Market Data Blockchain is effectively just the repository for these two categories of information i.e., Participant Proprietary Data and General Market Data, and it is through the Exchange-provided API that this information is able to be viewed and searched.

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