The Securities and Exchange Commission (SEC) has approved BSTX, a joint venture between tZero and Boston Options Exchange (BOX) Digital Markets, to operate a blockchain-based securities exchange.
Because of the blockchain transactions, BSTX aims for immediate or accelerated settlement (T+0 or T+1). In addition, a process similar to that of an Oracle will also provide market data recorded on the blockchain. This will be accomplished through BSTX’s blockchain, according to the company.
Both retail and institutional investors will be able to trade on the exchange. Since 2020, BOX has been attempting to obtain SEC approval for some exchange. The application’s first iteration was for a platform for Security Token Offerings (STOs). Unfortunately, the SEC denied BOX’s application to record end-of-day securities ownership balances and other trading data to the Ethereum blockchain in 2020.
BSTX CEO Lisa Fall said in a statement that “the SEC has taken an important step forward today in its approval of BSTX as a national securities exchange. We’re excited to keep working closely with the SEC to launch a fully regulated new exchange and help provide issuers and investors with more modern tools in the capital markets.”
BSTX has stated that it is working to support regulated crypto markets alongside its equity offerings in the future. However, the SEC stated that the approval is conditional on BSTX participating in relevant national market system plans. These are structures that are set up to disseminate real-time market data.
The Securities and Exchange Commission will also require BSTX to join an Intermarket surveillance group, an industry working group that coordinates regulatory compliance.
“For BSTX, today’s approval is just the beginning. The response we’ve received so far from both traditional and non-traditional finance participants has been encouraging and energizing. We intend to respond with a series of additional innovations that will benefit both the issuer and trading communities, based on future rule filings,” Fall added.