The following information is subject to regulatory approval and is subject to change. For more information or questions, please contact [email protected].

What is BSTX LLC?

BSTX proposes to operate as a facility of BOX Exchange LLC, which is a national securities exchange registered with the SEC. BSTX will operate a fully automated, price/time priority execution system for the trading of certain equity securities, including exchange traded products (“ETPs”).

Why does the industry need a new exchange?

The current system is far too difficult to navigate and often too expensive, which does not lend itself to smaller companies seeking investors. BSTX is creating a path for companies to publicly list their shares that is less convoluted and with less friction.

Will BSTX be a regulated exchange?

Yes. Pending regulatory approval, BSTX will be a facility of BOX Exchange LLC, which is a national securities exchange registered with the SEC.

Will securities listed on BSTX be registered securities?

Yes. Securities traded on BSTX will generally be required to be registered with the SEC under both Section 12 of the Exchange Act and Section 6 of the Securities Act of 1933.

Will BSTX be a primary listing market?

Yes. Eligible companies and issuers of ETPs that meet applicable listing requirements may list their securities on BSTX.

How does a market participant become a BSTX Participant?

To become a BSTX Participant, an applicant must complete a BSTX Participant Application and be approved by BOX Exchange. A BSTX Participant will then begin the onboarding process with the technical team. For more information on becoming a BSTX Participant, please contact [email protected].

How will BSTX utilize blockchain technology?

BSTX proposes that certain order and execution information relating to trading activity on BSTX would be recorded by a private, permission-based blockchain accessible through an application program interface available through the internet (the “BSTX Market Data Blockchain”). There are no affirmative actions that a BSTX Participant must take to provide information to the BSTX Market Data Blockchain. Rather, the BSTX Market Data Blockchain captures trading activity that occurs on BSTX in the normal course of business and is made available to BSTX Participants and non-BSTX Participant as an additional resource that they may choose to use in their discretion.

What information will be made available on the BSTX Market Data Blockchain?

There are two types of information that BSTX will make available on the BSTX Market Data Blockchain: (i) a BSTX Participant’s own order and transaction information related to its trading activity on BSTX, and (ii) anonymized, general market data available to all BSTX Participants and to non-BSTX Participants permissioned by BSTX.

What settlement period will transactions on BSTX utilize?

BSTX proposes to provide a mechanism for accelerated settlement (i.e., T+0 or T+1) of securities transactions on BSTX under certain circumstances, consistent with authority and functionality that the National Securities Clearing Corporation (“NSCC”) and The Depository Trust Company (“DTC”) have today as registered clearing agencies. Specifically, BSTX has proposed that BSTX Participants would be able to indicate a preference for settlement on a same day (T+0) or next trade day (T+1) basis in their orders submitted to BSTX. Any order sent to BSTX, including those indicating a T+0 or T+1 preference, would be able to interact with any other order against which it is marketable with a default settlement time of T+2 (i.e., regular way). However, if an order marked with a T+0 or T+1 settlement preference happens to execute against another order that is also marked for a T+0 or T+1 settlement preference, such orders will settle at the later in time settlement preference of the two orders. The possibility of shortened settlement times would have no impact on the Exchange’s proposed price time priority structure for order matching.

For example, assume a BSTX Participant submits Order A to BSTX and marks it with a T+0 settlement preference. Order A is marketable against both resting Order B (which has no preference for shortened settlement and which has time priority over Order C) and resting Order C (which is marked with a T+1 settlement preference and has priority second to that of Order B). Order A will interact first with Order B, with settlement occurring on T+2 (the later of the two settlement times for the respective orders). If Order B did not exist, Order A would interact Order C with settlement occurring on T+1.

How will securities settle and clear on BSTX?

All transactions on BSTX will clear and settle in accordance with the rules, policies, and procedures of registered clearing agencies. Specifically, BSTX anticipates that at the time it commences operations, securities that are listed and traded on BSTX would be securities that have been made eligible for services by DTC and that DTC would serve as the securities depository for such securities. It is also expected that confirmed trades in securities on BSTX would be transmitted to NSCC for clearing such that NSCC would clear the trades through its systems to produce settlement obligations that would be due for settlement between participants at DTC.