- The approval for Spot Ether exchange-traded fund (ETF) applications from ARK 21 shares and VanEck has been postponed.
- The U.S. regulator gave the reason behind the postponement as a lack of public participation.
- The regulator has therefore exercised it’s legal provision to lengthen the deadline by 90 days in order to have sufficient time to make a sound decision.
The approval for Spot Ether exchange-traded fund (ETF) applications from ARK 21 Shares and VanEck has been postponed. This is according to a notice filed on the 27th of September, by the United States Securities and Exchange Commission (SEC).
SEC said it was going to require a longer period to review the applications and make a decision on whether to allow or disallow a proposed rule change that would guarantee the listing of spot ETH ETFs from VanEck and ARK 21Shares on the Cboe BZX Exchange.
The U.S. regulator attributed the postponement of the decision to a lack of public comments on the proposed rule change. The decision will now be made on Dec. 25 and Dec. 26.
According to SEC, Cboe BZX Exchange, Inc. (“BZX” or “Exchange”) filed with the regulator a proposed amendment to allow the listing and trading of shares of the ARK 21Shares Ethereum ETF under BZX Rule 14.11(e)(4) under Commodity-Based Trust Shares, which is in line with Securities Exchange Act of 1934 and Rule 19b-4.
Section 19b of the act gives the SEC a window of 45 days or up to 90 days (in case a longer period is required), in which to determine and make a decision whether to accept or reject a proposed amendment to a rule. the 45th day is due to end on November 23rd. And therefore the U. S. regulator has decided to take a longer route in order to have sufficient time to consider the proposed rule change and the issues raised therein.
“Section 19(b)(2) of the Act4 provides that within 45 days of the publication of notice of the filing of a proposed rule change, or within such longer period up to 90 days as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or as to which the self-regulatory organization consents, the Commission shall either approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether the proposed rule change should be disapproved” SEC Said.
The notice was signed for the commission by the Division of Trading and Markets
On the day this announcement came from the SEC, the regulator also published a notice of its intentions to solicit comments from the public on request from the Nasdaq Stock Market seeking to have a rule change to allow it to list Hashdex Nasdaq Ethereum ETF; a combination of spot Ether holdings and futures contracts. In October last year, Nasdaq announced that they would only consider launching a crypto exchange platform when the regulatory clarity is achieved.
It is interesting to note that the SEC made a decision to delay the rule change for ARK 21 shares, even though the announcement was not due until November. According to ARK Investment Manager founder and CEO Cathie Wood, there was a possibility that the regulator was going to amend the rules to allow listing, but then do it in such a way that a number of companies are listed at the same time, in order not to destabilize the market by providing an avenue for unfair advantage.
Currently, there is no spot crypto ETF in the U.S. approved for listing by the SEC, but crypto-linked futures ETF and leveraged Bitcoin futures ETF have been allowed
There are other applications due for review for spot crypto ETF applications from firms including BlackRock, WisdomTree, Invesco Galaxy, Valkyrie, Bitwise and Fidelity are scheduled for October. This is happening even as other financial services make proposals on how crypto should list and delist. The New York State Department of Financial Services (NYDFS) has recently proposed stringent frameworks that are set to redefine the rules of the game for crypto firms operating in the state.