In the rule change proposal released by the SEC on Oct. 11, BOX asks the commission to “adopt rules to govern the trading of equity securities on the Exchange” which “would operate a fully automated, price/time priority execution system for the trading of ‘security tokens.’”
Boston Security Token Exchange (BSTX), a platform jointly owned by BOX Digital Markets and Overstock’s blockchain arm tZERO, has filed an application with the United States Securities and Exchange Commission (SEC) to approve the launch of a market for publicly traded registered security tokens.
The firm also hints at having its own listing standards by specifying that only tokens meeting them would be listed on the platform. The 129 pages long document explains in detail how the rules under which the exchange operates would need to change and how the platform would work.
Establishing its own listing standards
According to the proposal, the security ownership records will be stored on the Ethereum blockchain and would be updated at the end of each trading day. The exchange would operate between 9:30 a.m. and 4:00 p.m. EST.
A closed system on a public blockchain
Per the application, only the whitelisted Ethereum addresses would have access to the service, which means BSTX and its authorized operators who the company calls “wallet managers.”
The listed tokens would also need to be compliant with the ERC-20 standard with the addition of some security features and three smart contracts meant to track ownership, whitelisted addresses and compliance with regulations.
As Cointelegraph recently reported, security token offerings, or STOs, have more or less taken the mantle of their semi-defunct counterpart – initial coin offerings.
TZERO Officially Launches Public Security Token Trading оn Schedule
Retail giant Overstock’s blockchain subsidiary company, tZERO, has opened up its preferred equity security tokens – dubbed TZROP – for trading by accredited and non-accredited investors.
TZERO announced the news in a press release on Aug. 12, the previously proclaimed day of the launch. According to the announcement, the TZROP token allows investors to directly participate in the company’s revenue growth via a quarterly dividend model.
The announcement further states that the company could distribute a quarterly dividend of 10% of the company’s adjusted gross revenue for TZROP holders. However, it also specifies that this is subject to approval from the board of directors as well as Delaware law and accounting requirements.
The company additionally specifies that it could pay out these dividends in U.S. dollars, Bitcoin, Ether (ETH) or even with more security tokens.
Democratization of access to blockchain markets
The company’s CEO, Saum Noursalehi, framed this development as a milestone in democratizing the blockchain capital market sector for investors:
“Following the one-year anniversary of the close of our security token offering, non-accredited investors now have the ability to purchase and trade in our security tokens. Today marks another milestone as we further democratize access so all investors, regardless of net worth, can invest in the business opportunity of a blockchain-based capital market.”
As previously reported by Cointelegraph, tZERO initially offered its secondary trading of security tokens, to accredited investors only, on Jan. 24. At the time, Noursalehi similarly characterized the sale as democratizing access to global markets, commenting:
“The world of security tokens has lacked a regulated venue for secondary trading. The trading of our own security tokens is the crossing of the Rubicon for the new world of digital assets. This will create liquidity, democratize access, bring transparency and efficiency to global markets and accelerate the adoption of security tokens.”
