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.
Will BSTX be a regulated exchange?
Yes. Pending regulatory approval, BSTX will be a facility of BOX Exchange LLC that operates a market for the trading and listing of securities.
Will securities listed on BSTX be registered securities?
Yes. All 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 (“Securities Act”).
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].
What is the Ancillary Record Keeping Mechanism?
BSTX-listed securities will use blockchain technology as an ancillary record keeping mechanism. These ancillary records of ownership that are maintained using distributed ledger technology are not official records of ownership. Instead, the Ethereum blockchain serves as a complementary recordkeeping mechanism to official records of ownership maintained by market participants and would reflect certain end-of-day security position balance information as reported by market participants.
Will BSTX Participants need a wallet address?
BSTX Participants must, either directly or through its carrying firm, establish a wallet address to which its end-of-day security token balances may be recorded by contacting BSTX. A BSTX Participant can establish a wallet address by contacting BSTX directly or through its carrying firm acting on its behalf.
How will BSTX facilitate the updating of the blockchain every day?
Upon receipt of the end-of-day security balances from BSTX Participants, BSTX will provide such information to the third-party Wallet Manager to update the Ethereum blockchain as an ancillary recordkeeping mechanism to reflect updates in security balances.
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, securities that are listed and traded on BSTX will be securities that have been made eligible for services by The Depository Trust Company (“DTC”) and DTC will serve as the securities depository for such securities. The securities will be cleared and settled by the National Securities Clearing Corporation (“NSCC”) and DTC in exactly the same manner as those activities are performed by NSCC and DTC currently regarding a class of NMS Stock.