Setting The Timeline For ETF Application
The US Securities and Exchange Commission (SEC) has set a timeline for those eyeing a spot in the Bitcoin exchange-traded fund (ETF) approval. Accordingly, the regulator encourages applicants to complete their filings with final S-1 changes before December 29 or within the next four days.
Earlier, the commission met with the representatives of the seven firms in an important meeting to discuss the potential launch of spot Bitcoin ETFs in the first quarter of 2024. Representatives from prominent financial institutions eagerly sought details that could hasten the approval of their proposal from the regulatory body during a meeting attended by ARK Investments, BlackRock, Grayscale Investments, and 21 Shares.
In addition to these major asset managers, officials from possible listing exchanges such as Nasdaq and the Chicago Board Options Exchange were present throughout the meetings. Other relevant professionals, such as issuers and legal experts, were also present, and they all shared their insights regarding these pivotal discussions.
This period before the SEC’s deadline shows the competitive nature among these asset managers and the high-stakes nature of the crypto ETF market. Accordingly, these companies are putting in the effort to ensure compliance with regulatory policies in pursuit of a highly sought-after approval in the rapidly expanding market.
Finalizing modifications is a top priority among these efforts as the deadline approaches.
First Come, First Serve
Meanwhile, the financial watchdog reportedly informed those at the discussions that the earlier they complete their filings, the better their chances of making the first batch. In addition, the SEC stated that any potential issuer failing to comply by the impending deadline of December 29 would not be included in the first round of possible approvals for spot Bitcoin ETFs scheduled for early next month.
The Fox Business reporter, Eleanor Terrett, was among the first reporters to break the news about the SEC’s impending deadline for S-1 revisions. Thus, it is no surprise that several spot Bitcoin ETF applicants have recently made relevant changes to their S-1 filings, especially regarding redemptions.
Recall that the regulator would not allow in-kind redemptions using non-monetary payments like Bitcoin but would prefer a cash redemption model.
SEC’s AP Agreement Requirement
Furthermore, reports indicate that the SEC is looking for Bitcoin ETF authorized participants (APs) to be named explicitly in the filings, in addition to the cash-based requirement. Bloomberg ETF analyst Eric Balchunas cited the AP agreement as the last roadblock to the introduction of spot Bitcoin ETFs.
Balchunas further opined that this last hurdle would discourage some from participating in the ETF approval race. However, the analyst stressed that any asset manager with the AP agreement who can guarantee cash-based redemptions has a higher chance of getting ETF approval by the top US regulator.
The popular ETF analyst added that seven spot Bitcoin ETF applicants have switched to cash-only redemption methods, but none have finalized the AP agreement as of December 22. Balchunas added that several companies have completed other regulatory requirements except the AP agreement.
Other analysts believe that the US SEC has been transparent enough with its requirements for a spot BTC ETF approval. Hence, any asset manager that doesn’t fulfill all these requirements can’t fault the regulator.
