John McCrank

NEW YORK (Reuters), The U.S. Securities and Exchange Commission granted approval late Thursday to the country’s 17th stock market, a branch of Boston-based BOX Exchange. This subsidiary will use blockchain technology.

Jay Fraser, director, stated that the new BSTX exchange will launch during the second quarter. Although it will trade initial securities such as stocks or exchange traded funds, those securities could be traded on rival bourses.

Fraser stated that BSTX eventually aims to open trading to all U.S. stocks as well as tokenized securities. Stock tokens, which are digital representations of equity that have a pegged value to an underlying share and can be traded in fractional units, are called stock tokens.

Fraser stated that the goal is to make BSTX look more like cryptocurrency exchanges like Coinbase (NASDAQ) rather than traditional exchanges like Nasdaq.

BSTX will offer market data feeds on private blockchains in addition to its traditional pricing data feeds. According to the filing, that feed will let exchange members see both their own activity and the activities of other BSTX participants. However, this information is anonymized and delayed.

Fraser stated that the exchange will continue to use blockchain technology to help support tokenized securities.

BSTX, originally to be known as the Boston Security Token Exchange, was to trade only tokenized securities. However, the SEC rejected this plan in December 2020.

Additionally, members will have the ability to settle trades within 24 hours, rather than the standard two-day time. This would allow cash counterparties to make trade pledges and reduce the chance of default.

The entire securities industry debates moving to single day settlement.

The SEC stated in its Thursday notice that, despite the faster settlement times and blockchain feed, BSTX’s new rules were “substantially similar” to other stock exchanges.

BOX is an option exchange that’s jointly owned by Citadel Securities Principal Investments LLC and Toronto Stock Exchange operator TMX Group. It also includes brokers, including arm of Citadel Securities. Citigroup UBS.