April 22, 2020

Ms. Vanessa Countryman
Secretary
Securities and Exchange Commission
100 F Street NE., Washington, DC 20549

Re: Proposed Rule Change to Govern the Trading of Equity Securities through the Boston Security Token Exchange LLC, Securities Exchange Act Release No. 88300 (February 28, 2020), 85 FR 13242 (March 6, 2020) (SR-BOX-2019-19)

Dear Ms. Countryman:

The Securities Industry and Financial Markets Association (“SIFMA”)1 appreciates the opportunity to comment on the above-referenced proposed rule change (the “Proposal”) filed by BOX Exchange LLC (“BOX” or “Exchange”) with the Securities and Exchange Commission (“Commission”) under Section 19(b)(1) of the Securities Exchange Act of 1934 (“Exchange Act”). In the filing, BOX is proposing to adopt rules governing the listing and trading of a new type of equity security on a facility of the exchange known as the Boston Security Token Exchange LLC (“BSTX”).2

Introduction

BOX has submitted a set of proposed rule changes with the Commission, which collectively, would allow the Exchange to commence operations of BSTX.3 If approved by the Commission, BSTX would be a facility of the Exchange that will operate a fully automated, price/time priority execution system for the trading of digital “security tokens,” which would be equity securities that meet BSTX listing standards and for which ancillary records of ownership would be able to be created and maintained using distributed ledger (or “blockchain”) technology. These ancillary records of ownership would reflect certain end-of-day security token balances as reported by BSTX market participants to BSTX. According to the Exchange, official records of security ownership would be maintained by BSTX participants at The Depository Trust Company (“DTC”), and attribution of a security token on the Ethereum blockchain would not convey ownership of shareholder equity in the issuer. Trades in the security tokens would clear at the National Securities Clearing Corporation (“NSCC”) on a T+1 basis under BSTX rules. The Exchange further represents that the security tokens would qualify as NMS stocks pursuant to Regulation NMS.