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Federal Register / Vol. 86, No. 168 / Thursday, September 2, 2021 / Notices certain technologies are meritorious, the Commission has explained its view that the market will ultimately prove the worth of technologywhether the benefits to the industry and its investors of developing and using new services are greater than the associated costs. 54
Consistent with these statements, the Exchange believes that promoting use of blockchain technology through the BSTX Market Data Blockchain, accessed through an exchange-provided API, will allow BSTX Participants to observe and increase their familiarity with the capabilities and potential benefits of blockchain technology in a context that operates within the current equity market infrastructure and that the proposal will thereby advance and protect the publics interest in the use and development of new data processing techniques that may create opportunities for more efficient, effective and safe securities markets.55
Moreover, the Exchange believes that new technology, such as blockchain technology, may be able to help perfect the mechanism of a free and open market and a national market system, consistent with Section 6b5 of the
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54 Id.
55 Report of the Senate Committee on Banking, Housing & Urban Affairs, S. Rep. No. 9475, at 8
1975 expressing Congress finding that new data processing and communications systems create the opportunity for more efficient and effective markets. While the Exchange believes that its proposal represents an introductory step in pairing the benefits of blockchain technology with the current equity market infrastructure, other market participants and FINRA have recognized additional potential benefits to blockchain technology in various applications related to the securities markets. FINRA has stated one of the proposed benefits of blockchain technology is the ability to offer a timestamped, sequential, audit trail of transaction records. This may provide regulators and other interested parties e.g., internal audit, public auditors with the opportunity to leverage the technology to view the complete history of a transaction where it may not be available today and enhance existing records related to securities transactions. Financial Industry Regulatory Authority, Distributed Ledger Technology:
Implications of Blockchain for the Securities Industry January 2017, available at: https
www.finra.org/sites/default/files/FINRA_
Blockchain_Report.pdf. Further, Paxos Trust Company echoed similar themes in connection with its receipt of no-action relief from the Commission staff, and explained in its request letter certain benefits of blockchain technology including greater data accuracy and transparency, advanced security, and increased levels of availability and operational efficiency . . . . See Letter from Jeffrey S. Mooney, Division of Trading and Markets, Securities and Exchange Commission to Charles Cascarilla and Daniel Burstein, Paxos Trust Company, LLC re: Clearing Agency Registration Under Section 17Ab1 of the Securities Exchange Act of 1934 October 28, 2019, https
www.sec.gov/divisions/marketreg/mr-noaction/
2019/paxos-trust-company-102819-17a.pdf. The Exchange believes such benefits may be generally relevant to future potential applications of blockchain technology.

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Exchange Act.56 At a minimum, the Exchange believes that the use of blockchain technology to store historical market data, accessible through an API, may be a more efficient and effective mechanism for consuming historical market data. Rather than having to download a file of historical market data as is typically the case today, users of the BSTX Market Data Blockchain would be able to query and search the blockchain for particular information of interest to them through the API. The Exchange notes that it is not proposing to offer a separate historical market data feed other than the BSTX Market Data Blockchain, so the BSTX Market Data Blockchain would be the Exchanges historical market data product offering.57
Currently, the Exchange believes that market participants, such as prospective BSTX Participants, are able to obtain and review their own order and trade information as well as historical market data on one or more exchanges through a combination of using their own books and records and through acquiring historical market data products e.g., TAQ data. Depending on how a market participant might organize these sources of data or use historical market data, they may be able to run searches or filters to examine the market data in a manner similar to what will be available using the BSTX Market Data Blockchain. The BSTX Market Data Blockchain is essentially an Exchangeoffered tool accessible through an API
that provides the features of searching and filtering of BSTX market data to a BSTX Participant and non-BSTX
Participants with respect to anonymized data only. In other words, market participants have available to them today through other resources i.e., their books and records and historical data products where available the same data elements that the Exchange proposes to make available through the BSTX
Market Data Blockchain, but they may not have the information readily accessible or searchable in the same manner that it would be available using the BSTX Market Data Blockchain. In the event of any disruption to the BSTX
Market Data Blockchain or a BSTX
Participants access to the BSTX Market Data Blockchain, there would be no impact on the ability of market participants to trade Securities, which the Exchange believes furthers the protection of investors and the public interest, consistent with Section 6b5
U.S.C. 78fb5.
infra notes 147152 and accompanying text, describing the Exchanges proposed market data offerings.

of the Exchange Act.58 There would also no be disruption in the distribution of market data related to Securities because the BSTX Market Data Blockchain operates as a separate and distinct service of the Exchange independently of the Exchanges other market data products.
Trading Securities on Other National Securities Exchanges Securities would be eligible for trading on other national securities exchanges that extend UTP to them. As described above in Part II.E, Securities would be held in street name at DTC, have a CUSIP number, and would clear and settle through the facilities of a clearing agency registered with the SEC
i.e., NSCC and DTC respectively. As a result, Securities would be able to trade on other exchanges and OTC in the same manner as other NMS stock.
Accordingly, other exchanges would generally be able to extend UTP to Securities in accordance with Commission rules. The BSTX Market Data Blockchain would not impact the ability of Securities to trade on other exchanges or OTC.
Ability for BSTX Participants To Include a Parameter for a Preference for Settlement of Transactions in Securities Faster Than T+2
As described above in Section II.E.5., and based on discussions with representatives from DTCC, BSTX
believes that NSCC already has authority under its rules, policies and procedures to clear certain trades on a T+1 or T+0 basis, which are shorter settlement cycles than the longest settlement cycle of T+2 that is generally permitted under SEC Rule 15c61 for a security trade that involves a brokerdealer.59 Furthermore, BSTX
understands from representatives of DTCC that NSCC does already clear trades in accordance with this authority.
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.60 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
56 15

57 See
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58 Id.
59 See 60 See
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supra note 33.
proposed Rule 25060h.

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