The United States Securities and Exchange Commission (SEC) has unveiled updated regulatory procedures aimed at streamlining the approval process for spot cryptocurrency exchange-traded funds (ETFs).
The revised protocols introduce a standardized framework, eliminating the necessity for exhaustive individual reviews for each new fund application. This allows exchanges to operate under a more generalized set of rules applicable to a broader spectrum of crypto ETFs.
The policy adjustments affect significant stock exchanges, including Nasdaq, NYSE Arca, and Cboe BZX. These changes, implemented under Rule 6c-11, are designed to expedite the approval timeline, which previously extended to several months for each distinct product evaluation.
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To be eligible under these updated guidelines, the underlying digital asset of the ETF must adhere to specific criteria. These include being traded on a regulated market that shares data via the Intermarket Surveillance Group or being associated with a futures contract, that is already listed for a minimum of six months, and has a data-sharing agreement in place.
Alternatively, eligibility can be achieved if the asset is currently tracked by an existing ETF, holds a minimum exposure of 40%, and is listed on a recognized national exchange.
According to SEC Commissioner Hester Peirce, the aim of these revised regulations is to promote innovation and broaden investment options by reducing the time and complexity involved in launching crypto ETFs within the US market.
Bloomberg ETF analyst, James Seyffart, suggested that the adjustments have the potential to stimulate a significant increase in the availability of crypto-related investment products shortly.
Bitwise’s Chief Investment Officer, Matt Hougan, offered his perspective on the SEC’s accelerated crypto ETF authorization process on September 15th. Want to know more? Read the full story to learn his specific recommendations for investors.