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Federal Register / Vol. 86, No. 168 / Thursday, September 2, 2021 / Notices
lotter on DSK11XQN23PROD with NOTICES2

the BSTX Market Data Blockchain under Rule 17020 would apply equally to all BSTX Participants and non-BSTX
Participants accessing anonymized General Market Data and would therefore not impose any different burden on one BSTX Participant compared to another or between and among non-BSTX Participants. As described in detail in Item 3, BSTX
would issue login credentials to each BSTX Participant or non-BSTX
Participant through which users may access the BSTX Market Data Blockchain. Accessing the BSTX Market Data Blockchain would not be required.
If a BSTX Participant chooses to access the BSTX Market Data Blockchain, it would be able to see its order and transaction information on BSTX as well as anonymized General Market Data from other BSTX Participants and a non-BSTX Participant would only be able to see the anonymized General Market Data. Because the General Market Data would be anonymized, the Exchange believes that there would not be cause for concern regarding potential trading information leakage or the ability for a BSTX Participant to reverse engineer another BSTX Participants trading strategies.338 Moreover, the BSTX Market Data Blockchain would not require any affirmative action on the part of a BSTX Participant for its information to be recorded to the BSTX
Market Data Blockchain. Rather the Exchange would control all aspects of the BSTX Market Data Blockchain as a private, permission-based blockchain accessible to BSTX Participants, and the BSTX Market Data Blockchain would capture order and execution activity that occurs in the normal course on BSTX and is made available to BSTX
Participants and non-BSTX Participants with respect to anonymized General Market Data as an additional resource that they may use in their discretion.
The BSTX Market Data Blockchain would functionally provide market data similarly to what NYSE offers through TAQ data, but would simply provide it 338 Non-BSTX Participants accessing the BSTX
Market Data Blockchain would have access to the same anonymized General Market Data as BSTX
Participants. While a non-BSTX Participant would be treated differently than a BSTX Participant in that they would not be able to access any proprietary market data of a BSTX Participant, the reason for this difference is to prevent a non-BSTX
Participant from being able to see the confidential trading information of a BSTX Participant. If the Exchange were to provide non-BSTX Participants with access to one or more BSTX Participants proprietary market data, the Exchange would impose an undue burden on competition against BSTX Participants whose confidential trading information would be shared. Accordingly, nonBSTX Participants may only access anonymized, General Market Data.

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using distributed ledger technology.
Accordingly, although capturing a different set of market data than captured by NYSE TAQ data, the BSTX
Market Data Blockchain is procompetitive by offering a similar type of market data and using an innovative technology to do so. For these reasons, the Exchange believes that the BSTX
Market Data Blockchain would not impose any burden on competition.
In addition to not imposing any burden on competition, the Exchange believes that the BSTX Market Data Blockchain would provide two primary benefits to BSTX Participants. First, the Exchange believes that BSTX
Participants that choose to access the BSTX Market Data Blockchain may find the information useful as a focused source of market data regarding order and transaction information on BSTX.339 Second, the Exchange believes that the BSTX Market Data Blockchain would help familiarize BSTX
Participants that access the market data with the capabilities of blockchain technology in a manner that does not impose any burden on competition on them or others. The Commission has stated that it is mindful of the benefits of increasing use of new technologies for investors and the markets, and has encouraged experimentation and innovation . . . stating further that information and communications technologies are critical to healthy and efficient primary and secondary markets. 340 Regarding the judgment of whether the benefits of 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. 341
Consistent with these statements, the Exchange believes that promoting use of the functionality of blockchain technology through the BSTX Market Data Blockchain 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 thereby advances and protects the publics interest in the use and development of new data processing techniques that may create 339 For example, a BSTX Participant may wish to use the market data to review its trading activity on BSTX, determine what the market quality was at a particular time for a given Security or to evaluate execution quality on BSTX.
340 See supra n. 5254 and accompanying text.
341 Id.

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opportunities for more efficient, effective and safe securities markets.342
Regarding consideration 3 and the manner in which Security transactions may be cleared and settled, the Exchange proposes under BSTX Rule 25100d to clear and settle transactions in Securities in accordance with the rules, policies and procedures of a registered clearing agency. The Exchange believes that this is consistent with how other exchange-listed equity securities are cleared and settled today.
Therefore, BSTXs rules regarding clearance and settlement of Security transactions do not impose any relative burden on competition regarding the manner in which trades may be cleared and settled because market participants would be able to clear and settle Security transactions in the same manner as they already do in other types of NMS stock. The Exchange believes that this is equally true regarding the proposed ability of BSTX
Participants to submit to BSTX orders in Securities in which they include a parameter expressing a preference for T+1 or T+0 settlement, consistent with the rules, policies and procedures of a registered clearing agency, as proposed in the operation of proposed BSTX
Rules 25060h and 25100d. As described in detail in Item 3 above, BSTX believes that NSCC and DTC
already have authority under their rules policies and procedures to clear and settle certain trades on a T+1 or T+0
basis and that these clearing agencies do already clear and settle trades in accordance with this authority.
The Exchange believes that answering the question of whether a burden on competition is imposed by the proposal to allow BSTX Participants to specify an order parameter indicating a preference for potential settlement on a T+0 or T+1
basis requires an assessment under three general circumstances for order submissions and executions. The first possible circumstance contemplates orders that BSTX Participants would submit to the BSTX System and that would result in an execution on BSTX.
Here, it would be entirely the choice of any BSTX Participant regarding whether to include an order parameter indicating a preference for T+0 or T+1 settlement where possible under the settlement logic in BSTX Rule 25060h and subject to functionality permitted by the rules, policies and procedures of a registered clearing agency. If no such additional parameter is included in the order or the matched orders are not eligible for shortened settlement pursuant to the rules, policies and procedures of a 342 See
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supra n.55 and accompanying text.

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