SEC delays ETF decisions (again)
The SEC still can’t make up its mind, almost a year after first being presented with an ETF
In June of last year, the Securities and Exchange Commission (SEC) started receiving a flurry of rule change proposals for cryptocurrency exchange-traded funds (ETF). Despite having ample time to consider them, the commission has announced that still can’t make up its mind and has announced extensions in the decision-making process for two ETF proposals.
Bitwise Asset Management, along with the NYSE Arca exchange, submitted its rule change proposal earlier this year and it was subsequently published by the SEC on February 15. Per the SEC’s guidelines, it has an initial 45 days to make a decision, but can request extensions of up to a maximum of 240 days if necessary. Last Friday, it announced that it needed more time, stating on its website, “The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act, 6 designates May 16, 2019 as the date by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change (File No. SR-NYSEArca-2019-01).”
One of the most well-known ETF rule change proposals was submitted by VanEck and GlobalX with the CBOE exchange last summer. With all the delays sought by the SEC, it was about to expire this past February when the CBOE withdrew it. The exchange stated at the time that it discussed the proposal with the SEC and then resubmitted the application in February. The application expired yesterday, and the SEC has, in the same manner as it did with the Bitwise ETF, stated that it still can’t decide. It has given a new date of May 21 for making a decision, unless it announces yet another delay.
The delays shouldn’t come as too much of a surprise. The SEC had sought public comments on the proposals and the response was extremely light. Out of the handful of responses received, the majority of the individuals stated that they didn’t believe the SEC should approve the proposals. While this does not necessarily influence the SEC’s decision, it certainly didn’t do much to help the case for crypto ETFs.