The US Securities and Exchange Commission (SEC) is seeking more time to approve or disapprove the proposed rule change filed by the Boston Security Token Exchange (BSTX) to operate as facility of the exchange.
According to a letter dated April 1st, the SEC has postponed the April 2 deadline in light of responses to a recent proposed rule change to BSTX’s original filing.
According to reports, the Boston Security Token Exchange (BSTX) is a joint venture of BOX Digital Markets and Blockchain arm of Overstock Inc. On December 18, 2019, BOX Digital Markets filed a rule change proposals detailing its operations. On February 28, 2020, the firm filed an amended proposal with the U.S. Securities and Exchange Commission (SEC).
The BSTX is a subsidiary of BOX Digital Market that, if approved, will operate as a trading platform for tokenized equity as well as store ownership data on the Ethereum blockchain. The SEC letter, talking about the operation of BSTX, reads:
“BSTX proposes to operate a fully automated, price-time priority execution system to list and trade NMS stocks that meet BSTX listing standards and for which ancillary records of ownership reflecting certain end-of-day security token balances as reported by market participants would be created and maintained using distributed ledger technology (such securities to be referred to as “security tokens”).”
The SEC, in the letter said that it wanted more feedback to decide whether the proposed operations of BSTX are pursuant to related sections of the Securities Exchange Act of 1934. The SEC also wants to check that the information provided by BSTX are sufficient to give an approval.
The SEC further said that to date, it has received two comment letters on the proposal. One commentator has requested an extension of the comment period to consider the proposal. Other commentator “believes that the Commission should disclose and study further details on the relationships between the aforementioned entities,” the SEC stated in the letter.
This means the regulator want time to gather information about the matter. The SEC seeks and encourages interested persons to provide additional comments to approve or disapprove the proposed rule change. The letter concludes:
“The Commission is instituting proceedings to allow for additional consideration and comment on the issues raised herein, including as to whether the proposal is consistent with the Act.”