SEC Approved Plans & Proposed Rule For Blockchain-based ETFs Could be Game Changer
The US Securities and Exchange Commission (SEC), may be helping companies launching their own blockchain exchange-traded funds (ETFs) to the market. The regulatory agency has been working in some changes that would remove the need for ETFs to seek special permission form the SEC.
SEC Reduces Requirements For ETFs
SEC Chairman Jay Clayton explains that the new rules would cover most ETFs operating today and all similar ETFs that may seek to launch in the future. At the same time, he explained that the new rules would not cover all the products, which will require greater scrutiny.
Complex leveraged products are called ‘exotic’ ETFs and would not be eligible for the new process. The change may allow blockchain ETFs to spread in an easier way. But it is also important to remember that the SEC has also been thinking about controlling in a more precise way Blockchain-related ETFs.
For investors, these ETFs may be a less risky way to enter the blockchain and crypto market without having to necessary experience all the volatility in the field.
But it is also important to mention that there has been no clarification on the matter about blockchain ETFs. The may require ‘greater scrutiny.’
At the moment it would not be possible to see Bitcoin ETFs. The SEC has to comment on the matter, but it is almost certain that bitcoin-based ETFs will not see any favor from the proposed new rules.
There are different Bitcoin ETFs that are being now scrutinized by the SEC. The regulatory agency needs to give an approval before they start operating, but the requirements tend to be very strict and all the proposals presented have failed to comply with the rules imposed by the SEC. Until now, over a dozen Bitcoin ETFs have been rejected.
It is important to mention that experts believe that an approval for a Bitcoin ETF may happen sooner than later, and would be significantly positive for the environment. Some days ago, the SEC published a document on its website seeking for public feedback on an application made by the Chicago Board Options Exchange (CBOE Global) to list an ETF with bitcoin shares backed by VanEck and SolidX.
With these new rules that the SEC is trying to implement it would be interesting to see if blockchain-based ETFs would be treated in the same way as other ETFs that invest in traditional technology companies.
Todd Rosenbluth, director of ETF & mutual fund research at CFRA Research, explained:
“Support new ETF launches, particularly tied to long-term thematic approaches, from small independent asset managers.”
At the moment there are seven blockchain-based ETFs that have been approved by the SEC. Bitcoin ETFs did not have the same good luck.