The US Securities and Exchange Commission (SEC) approved
applications from major exchanges, including Nasdaq, CBOE, and the NYSE, to list
exchange-traded funds tied to the price of ether today (Thursday). This approval potentially opens the door for
these products to begin trading later this year.
Issuers to Seek Regulatory Approval
Nine issuers, including VanEck, ARK
Investments/21Shares, and BlackRock, applied to launch ETFs tied to ether
following the SEC’s approval of spot Bitcoin ETFs in January. Despite the positive feedback, these applicants must obtain approval for ETF registration statements detailing investor disclosures before the funds can start trading.
The SEC’s notice stated: “After careful review, the commission
finds that the proposals are consistent with the Exchange Act and rules and
regulations thereunder applicable to a national securities exchange. In
particular, the commission finds that the proposals are consistent with Section
6(b)(5) of the Exchange Act, which requires, among other things, that the
Exchanges’ rules be designed to prevent fraudulent and manipulative acts and
practices and in general, to protect investors and the public interest.”
US SEC approves exchange applications to list spot ether ETFs https://t.co/zvJ6e0L99U pic.twitter.com/okQKGNpLxx
— Reuters (@Reuters) May 23, 2024
Market participants were prepared for a negative
outcome, especially considering the lack of engagement from the SEC on the
applications, Reuters reported. However, in an unexpected turn of events, the SEC’s officials requested the exchanges to make quick adjustments to the
filings on Monday, leading to a rush to meet the new requirements in
a short time.
Positive Market Sentiment Boosts Ether
However, the SEC has not set a deadline for deciding on the registration statements, leaving industry participants uncertain about when
trading could commence. Optimism about the SEC’s approval of Ether ETF pushed the price of the
second-largest cryptocurrency by 25% on the weekly chart. Notably, the asset management firm plans to avoid staking
and derivatives to address regulatory concerns.
In the run-up to the decision-making deadline, the SEC’s Chair Gary Gensler, known for his skepticism toward cryptocurrencies, declined to comment when reporters asked about the ether ETFs. A spokesperson from the commission also stated that the agency would not provide
further comments on the matter. Earlier, a section of US Congress urged Gensler to approve ether ETFs.
This article was written by Jared Kirui at www.financemagnates.com.
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