SEC to Review 9 Bitcoin ETF Applications by October 26th

SEC to Review 9 Bitcoin ETF Applications by October 26th

The SEC has set a deadline of the 26th of October for reviewing nine previously rejected applications for creation and listing of bitcoin exchange tradeable funds (ETFs).

The prospect of the creation of a bitcoin ETF was one of the hottest stories over the summer, however the rejection of a series of applications to the Securities and Exchange Commission (SEC) dampened many hopes of seeing such a product before 2019.

However, the SEC announced in August that it would be reviewing the initial rejection of nine applications for ETFs submitted by three separate parties and has now set itself a decision deadline just twenty days from today.

The cases under review relate to two applications by ProShares and five by Direxion which both proposed a listing on the New York Stock Exchange ETF platform NYSE Arca, as well as two applications from GraniteShares to be listed with CBOE.

The SEC has requested that “any party or other person” may present to it statements in support of or rejection of a bitcoin ETF by October 26th.

Back in August, ToshiTimes reported the SEC had rejected all nine applications concerned here with the following statement:

“[T]he Commission is disapproving this proposed rule change because, as discussed below, the Exchange has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of the Exchange Act Section 6(b)(5), in particular the requirement that a national securities exchange’s rules be designed to prevent fraudulent and manipulative acts and practices.”

It has stated that this assessment will remain in place for the duration of this review period.

The SEC, in a subsequent statement, has amended some changes initially proposed to GraniteShares’ operational models.

This news is likely to garner the particular attention of many who are particularly awaiting a bitcoin ETF, as the decision to review the SEC’s rejection of the nine applications was taken just 24 hours after the rejection itself on August 22nd. Whilst we should not take this to mean that a reversal of the SEC’s up-to-now blanket ban on ETFs is imminent, it should be seen as an encouraging sign that these products are not being dismissed outright, but rather are receiving the proper attention of the authorities on a case by case basis. This would suggest that these applications are being taken seriously and that it is rather a matter of when, not if, an ETF will make its appearance.

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