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Federal Register / Vol. 86, No. 168 / Thursday, September 2, 2021 / Notices those applicable to BSTX. Finally, as it does with options, the Exchange will perform automated surveillance of trading on BSTX for the purpose of maintaining a fair and orderly market at all times and monitor BSTX to identify unusual trading patterns and determine whether particular trading activity requires further regulatory investigation by FINRA.
In addition, the Exchange will oversee the process for determining and implementing trade halts, identifying and responding to unusual market conditions, and administering the Exchanges process for identifying and remediating clearly erroneous trades pursuant to proposed Rule 25110.
NMS Plans The Exchange intends to join the Order Execution Quality Disclosure Plan, the Plan to Address Extraordinary Market Volatility, the Plan Governing the Process of Selecting a Plan Processor, and the applicable plans for consolidation and dissemination of market data. The Exchange is already a participant in the NMS plan related to the Consolidated Audit Trail. Consistent with Section 6b5 of the Exchange Act,324 the Exchange believes that joining the same set of NMS plans that all other national securities exchanges that trade equities must join fosters cooperation and coordination with other national securities exchanges and other market participants engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities.

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2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of the Exchange Act,325
in general and with Section 6b5 of the Exchange Act,326 in particular, in that it is designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest; and it is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers, or to regulate by virtue of any authority conferred by this title matters not 324 15

U.S.C. 78fb5.
U.S.C. 78a et seq.
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related to the purposes of this title or the administration of the Exchange.
The Exchange believes that BSTX will benefit individual investors, other market participants, and the equities market generally. The Exchange proposes to establish BSTX as a facility of the Exchange that would trade equities in a similar manner to how equities presently trade on other exchanges. BSTX would also make available to BSTX Participants the BSTX
Market Data Blockchain, which provides certain order and transaction information with respect to a BSTX
Participants trading activity on BSTX, as well as anonymized order and transaction data with respect to all trading activity occurring on BSTX. The Exchange believes that the content of information available on the BSTX
Market Data Blockchain would generally be similar to TAQ data made available by NYSE today, except that i the BSTX Market Data Blockchain would use a private, permissioned network controlled by the Exchange to make the market data available to BSTX
Participants; ii a BSTX Participant would be able to certain see nonanonymized information about its own trading activity on BSTX; 327 and iii the BSTX Market Data Blockchain would include market data only with respect to trading activity occurring on BSTX, while the Exchange understands that TAQ data includes certain trading and quotation data that may occur on other markets.328 The Exchange believes that the use of blockchain technology, through a private permissioned network accessible through an API that operates in manner that is fully compatible with the existing regulatory structures for trading, recordkeeping, and clearance and settlement that market participants are familiar with is an appropriate way to introduce blockchain to the current market structure. BSTX Participants would not have affirmative obligations to provide information to the blockchain nor would they be required to access or use it. The data inputs to the BSTX
Market Data Blockchain would be captured in the ordinary course as BSTX
Participants orders and messages are sent to the Exchange through the FIX
327 All non-anonymized information would be available only to the BSTX Participant who provided such information to the Exchange through its trading activity on BSTX.
328 See e.g., NYSE, Daily TAQ Fact Sheet, noting that TAQ data provides users access to all trades and quotes for all issues traded on NYSE, Nasdaq and the regional exchanges for a single trading day and is a comprehensive history of daily activity from NYSE markets and the U.S. Consolidated Tape covering U.S. Equities instruments CTA and UTP
participating markets https www.nyse.com/
publicdocs/nyse/data/Daily_TAQ_Fact_Sheet.pdf.

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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.329
The Exchange has proposed to make anonymized General Market Data on the BSTX Market Data Blockchain available to both BSTX Participants and nonBSTX Participants through the same means of an API. Accordingly, the Exchange believes that because General Market Data available on the BSTX
Market Data Blockchain would be available to both BSTX and non-BSTX
Participants, 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.330 Non-BSTX
Participants would not be provided access to any Participant Proprietary Data to protect the private trading information of each BSTX Participant and each BSTX Participant would only have access to its own Participant Proprietary Data, which the Exchange believes is consistent with Sections 6b5 and 6b8 of the Exchange Act because providing the Participant Proprietary Data of a given BSTX
Participant to non-BSTX Participants or other BSTX Participants would unfairly discriminate against the BSTX
Participant whose information is being shared and could place that BSTX
Participant at an unfair competitive disadvantage if its order and trading information were shared with other market participants.
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.331 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 329 15

U.S.C. 78fb5.
U.S.C. 78fb5 and 8.
331 15 U.S.C. 78fb8.
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