The SEC has approved a proposal to “modernize” the ETF application process. But will it actually impact crypto-related products?
On June 28[1], the Securities and Exchange Commission (SEC) voted to propose a new regulatory framework that would allow exchange-traded funds (ETF) to come to market without requiring applicants to apply for individual exemptive orders. The proposal is intended to speed up the application process, which can take months, increase competition and innovation in the ETF marketplace, and hopefully give investors more choices on how to invest their money.
According to a public statement[2] made by SEC Chairman, Jay Clayton, ETFs are among the most popular vehicles investors have used to participate in or hedge against large fluctuations in the stock market. ETFs also give investors access to different investment strategies, some conventional and others unconventional.
Clayton stated, "One out of every three investors holds ETFs. That is a remarkable statistic to think about. Younger investors are particularly drawn to ETFs. According to a survey of ETF investors, so-called 'millennial' investors – between the ages of 25 and 37 – are putting about 36% of their investments into ETFs."
This new rule will only apply to common ETFs and not those that pertain to special interests or are outside the scope of the new proposal.
The proposal does not mention cryptocurrency or blockchain technology, so it remains to be seen whether cryptocurrency-based ETFs will be subject to the new rules.
According to sources, the proposal is not aimed at any investment strategies or asset classes in particular, meaning that a bitcoin ETF would have to satisfy the same requirements as any other ETF.
But the SEC's stance on cryptocurrency/blockchain-based ETFs has been uncertain, so far. In a January letter[3],
