# FAQs **Q: What is the BITNET?** \ A: The BITNET is XFT's all-to-all blockchain trading system home to 20000+ tokenized securities across all asset classes. **Q: Why BITNET?** \ A: Programmatic multi-asset composability. Offline digital payments. Use stocks, bonds, real estate to buy groceries. BITNET improves: 1. Operational risk mitigation through standardization and automation 2. Intraday liquidity 3. Post-trade FX matching and netting processes BITNET reduces: 1. Funding and number of payments required 2. Inconsistent FX matching and FX netting 3. Credit consumption 4. Intraday overdraft costs and correspondent bank charges 5. Communication required to confirm positions pre-settlement **Q: What is the International Deposits Network?** \ A: The International Deposits Network (IDN) is XFT's RTGS payment system for tokenized commercial bank deposits. It is used to put onchain tokenized products into traditional offchain bank accounts. Send cross-border real-time payments using IDN blockchain deposit accounts. **Q: What is XFT Token Service?** \ A: XFT Token Service generates TANs for legacy and blockchain payment rail interoperability. This means users can send stablecoins to a wallet using, for example, the associated ABA RTN. It is also used for onchain bank account creation. **Q: What is Bitstream?** \ A: Bitstream is the central securities depository arm of The XFT Group. **Q: What is the Direct Registration System (DRS)?**\ A: DRS allows registered shares to be held in electronic form without having a physical security certificate issued as evidence of ownership. **Q: How are my securities protected if I choose street name ownership?** \ A: Nearly all broker-dealers are members of Securities Investor Protection Corporation (“SIPC”). SIPC protects customers of a SIPC member broker-dealer against the loss of securities and cash deposited with that SIPC member for the purchase of securities. If that SIPC-member broker-dealer fails, SIPC advances up to $500,000 per customer (including a $250,000 limit for cash claims) to cover a shortfall in customer property. Many broker-dealers also carry insurance in excess of SIPC’s coverage. However, SIPC does not protect you against losses caused by a decline in the market value of your securities. For more information about SIPC coverage, please read the SEC’s Investor Bulletins “SIPC Basics Parts 1 and 2” and the SEC’s glossary term on “SIPC protection". **Q: What is a medallion guarantee?**\ A: Medallion Guarantee is a special stamp that’s used when you sell or transfer US securities. It confirms that the signature authorizing the sale or transfer is genuine and that the signer has the legal capacity and authority to sign the document.
Why blockchain DRS? FOR INVESTORS: * **Registered legal ownership:** DRS records the investor’s name on the issuer’s books, clarifying legal ownership and simplifying some ownership disputes. * **Direct proxy and voting communications:** Registered owners typically receive proxy materials and can vote directly with the issuer, improving participation in corporate governance. * **Reduced share lending risk:** Shares in DRS are generally not available for broker lending, which reduces the chance that your shares will be loaned out into short positions. * **Protection from broker account actions:** Because holdings are off the broker’s books, certain broker-level events (e.g., broker insolvency, margin liquidation) may have different operational implications for DRS-registered shares. * **Direct receipt of issuer communications and corporate action processing:** Transfer agents send notices and process corporate actions for registered owners. FOR ISSUERS/CORPORATES: * **Clearer shareholder records:** Direct registration gives issuers an accurate list of registered owners, which aids governance, mailings, and engagement. * **Improved governance and communication:** With direct registration, issuers can target shareholder outreach and ensure delivery of proxy materials. * **Potential reduction in abusive shorting/over-lending:** A higher proportion of shares registered directly may reduce shares available for lending, potentially lowering mismatch between outstanding shares and borrowable supply. *** Issuer Benefits * Access a new, broader global investor base * Reduce financing costs and retain more proceeds * Control timing and parameters of share issuance * Receive stablecoin proceeds instantly at settlement Investor Benefits * Buy newly issued shares straight from the company * Access pricing below Nasdaq or NYSE markets * Receive tokenized shares with instant settlement * Full economic and governance rights and additional onchain utility over time
Why blockchain DRS for investors? Registered legal ownership: DRS records the investor’s name on the issuer’s books, clarifying legal ownership and simplifying some ownership disputes. Direct proxy and voting communications: Registered owners typically receive proxy materials and can vote directly with the issuer, improving participation in corporate governance. Reduced share lending risk: Shares in DRS are generally not available for broker lending, which reduces the chance that your shares will be loaned out into short positions. Protection from broker account actions: Because holdings are off the broker’s books, certain broker-level events (e.g., broker insolvency, margin liquidation) may have different operational implications for DRS-registered shares. Direct receipt of issuer communications and corporate action processing: Transfer agents send notices and process corporate actions for registered owners.
Why blockchain DRS for issuers/corporates? Clearer shareholder records: Direct registration gives issuers an accurate list of registered owners, which aids governance, mailings, and engagement. Improved governance and communication: With direct registration, issuers can target shareholder outreach and ensure delivery of proxy materials. Potential reduction in abusive shorting/over-lending: A higher proportion of shares registered directly may reduce shares available for lending, potentially lowering mismatch between outstanding shares and borrowable supply.
What is Order Matching System? An order matching system is an electronic platform that automatically pairs buy and sell orders for securities based on criteria like price and quantity.
ECN FAQ
How does the order book work? The order book is where all the open orders, bids (open buys) and asks (open sells), for a stock are listed. New bids are matched against asks on the order book, and new asks are matched against bids on the order book for execution.
How are orders matched? In general, orders are matched when bid (*buy*) and ask (*sell*) prices **equal** or **cross** each other - prioritized based on “best price” and time submitted. Prices **cross** when a bid (an order to *buy*) is placed at a price higher than any current asks on the order book, or vice versa, when an ask (an order to *sell*) is placed at a price lower than any current bids on the order book.
### Definitions, acronyms, and abbreviations *** SSI = Standing Settlement Instruction SI = Settlement Instruction Cash in lieu is a de facto sale of a stock. a sampling index fund heartbeat trades rebalance drag tax drag tracking error full replication synthetic replication total return swap bona fide market making Continuous Net Settlement (CNS) Continuous Linked Settlement (CLS) sub m reg sho create-to-lend failure to deliever contra side reverse conversions FLEX option hard-to-borrow threshold securities married put Primary market: the market that deals with the issuance of new securities Secondary market: where investors purchase securities/ETFs from other investors [Continuous net settlement (CNS)](https://www.nasdaq.com/glossary/c/continuous-net-settlement)\ Method of [securities](https://www.nasdaq.com/glossary/s/security) clearing and [settlement](https://www.nasdaq.com/glossary/s/settlement) using a [clearing house](https://www.nasdaq.com/glossary/c/clearinghouse), which matches [transactions](https://www.nasdaq.com/glossary/t/transaction) to [securities](https://www.nasdaq.com/glossary/s/security) available, resulting in one [net](https://www.nasdaq.com/glossary/n/net) receive or deliver [position](https://www.nasdaq.com/glossary/p/position) at the end of the day. * **Authorized participants:** Large institutions that transact directly with the ETF provider to create or redeem shares of an ETF. * **Creation unit:** The minimum number of ETF shares required to transact directly with the ETF issuer. * **Primary market:** The direct exchange of securities for shares of an ETF between authorized participants and ETF issuers. * **Secondary market:** The national markets system (e.g., the stock exchanges and other venues where listed securities can be traded). Shares of ETFs are continuously bought and sold throughout the day on an exchange or other trading venue by investors. CORPORATE ACTIONS * Cash dividend on equities / preference shares * Stock dividend on equities * Interest on bonds / fixed income securities * Redemption of bonds / fixed income securities either on Call / maturity date * Exercise of rights / warrants associated with securities CORPORATE ACTIONS Stock Splits\ Cash Dividend \ Stock Dividend \ Interest on Fixed Income Securities \ Redemption on Fixed Income Securities \ Rights / Warrants \ Stock Splits \ Mergers and Spin-offs *** RESOURCES [DTCC Alert](https://dtcclearning.com/helpfiles/data/alert/bd_help/Content/Topics/help/bd/home_page/coveo_exclude/bd_hp.htm) [SEC counterfeiting stock](https://www.sec.gov/comments/s7-12-15/s71215-9342251-260411.pdf) --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.xft.finance/bitnet/faqs.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.