BSTX obtains SEC approval to use blockchain for T+0 and T+1 settlement

Rick Steves

“Utilizing future rule filings, we plan to respond with a series of further innovations that will benefit both the issuer and trading communities”.

The U.S. Securities and Exchange Commission has approved BSTX as a fully automated, price/time priority execution exchange for trading securities leveraging private blockchain technologies.

BSTX is a joint venture of tZERO Group, Inc. and BOX Digital Markets LLC and is designed to create a new dynamic for retail and institutional investors as well as issuers while setting a new standard for the use of blockchain.

The upcoming national securities exchange will also serve as an industry sandbox in a time when distributed ledger technology has still much room to grow and mature in know-how, infrastructure, efficiency, and adoption.

Blockchain to help trading go T+0

BSTX is expected to bring shorter settlements to the ecosystem as it is meant to be the first securities exchange to allow participants to choose accelerated settlement (i.e., T+0 or T+1) for transactions on the exchange.

Reducing the time of settlement was one of the most discussed topics within the industry in 2021 after the meme stock craze in January and the consequent trading restrictions by Robinhood and other US-based brokers who were unable to respond to the cheer volume of market orders swiftly enough.

BSTX’s approach is integrated with the accelerated clearance and settlement capabilities supported by NSCC and DTC.

The trading platform will use proprietary blockchain data feeds to make participant market data available to them and to make general market data available to industry participants by using a secure, private- permissioned blockchain that it controls.

Lisa Fall, Chief Executive Officer at BSTX, commented: “The SEC has taken an important step forward today in its approval of BSTX as a national securities exchange facility. We are eager to continue to work closely with the SEC to launch BSTX as a fully regulated exchange and to help provide capital markets with more modern tools for issuers and investors. We are particularly grateful to our technology partner in this endeavor tZERO. We are looking forward to continuing to work with them to provide institutional-grade trading technology to participants on BSTX.

“Our overarching goal is to empower developers and exchange observers to leverage the innovation and modern market structure currently being used in crypto and blockchain technologies to come up with ideas to improve the securities listing and trading experience for all”, she continued.

“Today’s approval is only the start for BSTX. We are encouraged and energized by the outreach to date from both traditional and non-traditional finance participants. Utilizing future rule filings, we plan to respond with a series of further innovations that will benefit both the issuer and trading communities”.

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