The United States Securities and Exchange Commission (SEC) issued a public statement on Tuesday announcing that it has postponed its decision on the proposed rule change filed by Cboe BZX Exchange.
The pending decision concerns the listing and trading of the Bitcoin exchange-traded fund (ETF) managed by financial services firm SolidX and investment company VanEck.
The SEC has issued a statement [PDF] designating September 30 as the official date on which the commission shall approve or even disapprove the proposed change of the rule. The commission may also institute proceedings to determine whether to disapprove the change on the said date.
Rule Change Proposal
The cryptocurrency world has been paying a lot of attention to this particular Bitcoin ETF. An ETF refers to a security that tracks a collection of virtual assets proportionately represented in its shares.
They have caused excitement in the cryptocurrency world as they are considered pivotal to the mass adoption of cryptocurrencies as an investment platform. According to an SEC statement, it has received over 1,300 comments on the rule change proposal as of August 6.
The SEC currently has 45 days to consider the proposed rule change by Cboe BZX Exchange. Approval of the rule would allow the VanEck SolidX Bitcoin ETF to list on the exchange.
Cboe BZX Exchange filed the rule change proposal on June 20. The proposal was subsequently published in the Federal Register on July 2.
The SEC stated that as stipulated by the Securities and Exchange Act, they may designate a longer period within 45 days following publication in the Federal Register within which to make a decision on the proposed rule change.
The commission explained that the postponement provides sufficient time for the consideration of the rule change proposal. But, this may not be the final postponement of the decision on this Bitcoin ETF.
The SEC may extend it up to 240 days following publication in the Federal Register, although this is very unlikely. The good news is that some major concerns from the previous rejection of the proposed rule change have been addressed.
On August 1, the SEC published a document [PDF] detailing a meeting between representatives from Cboe BZX Exchange, VanEck Securities, SolidX and SEC officials.
VanEck Securities and SolidX submitted a presentation arguing why the SEC should approve the proposal. The presentation addressed the concerns that the SEC had in March last year.
One notable change was the existence of multiple derivatives markets for Bitcoin including Cboe Bitcoin futures, CME Bitcoin futures and Ledgerx bitcoin swaps. These markets are all regulated by the U.S. Commodity Futures Trading Commission (CFTC).
The second change concerns product pricing. The proposed trust will utilize OTC (“over-the-counter”) index for pricing and NAV (“net asset value”).
CFTC regulation means that the commission would be able to identify any manipulative activity. Potential manipulation and lack of regulation were some of the concerns raised in the trust’s previous disapproval.
The presentation listed several other notable changes that address concerns that the SEC had last year.
This Bitcoin ETF will be open to investment in early 2019 if the SEC approves the proposed rule change.