SEC Moves Forward in Evaluation of Franklin Templeton, Hashdex Bitcoin ETF Proposals
Summary:
The U.S. Securities and Exchange Commission (SEC) is proceeding with its review of spot Bitcoin (BTC) exchange-traded fund (ETF) proposals from Franklin Templeton and Hashdex. The SEC has called for public comments on these proposals within a 35-day window. While the Hashdex BTC ETF would trade on the New York Stock Exchange Arca, Franklin Templeton's would be listed on Cboe BZX. The assessment entails addressing topics related to the potential approval of these ETFs, including susceptibility to manipulation and significant exchange sizes. Hashdex's fund structure, a future ETF that holds spot BTC, deviates from Franklin Templeton’s, prompting different assessment questions.
The U.S. Securities and Exchange Commission has declared upcoming procedures in the assessment of the suggested spot Bitcoin (BTC) exchange-traded fund (ETF) bids by Franklin Templeton and Hashdex. The regulatory body has asked for objective remarks on the proposals to either sanction or reject the Forms 19b-4 submitted by the petitioning parties. The said SEC Form 19b-4 is a piece of public disclosure approved distinctly by the SEC Trading and Markets Division whereas Form S-1, the offering prospect that needs approval from Corporate Finance Division. A 35-day window has been set forth from the announcement's day in the Federal Register to share remarks and responses.
The proposed rule modifications, which are essentially applications that would facilitate the ETFs trading, were presented in late September. The Hashdex ETF is slated for trading on the New York Stock Exchange Arca, while Franklin Templeton’s would be listed on Cboe BZX. On November 15, the SEC elongated their timeframe for ruling on the requests.
The questions focus on potential ETF approval-related matters, inviting viewers to evaluate matters like the risk of manipulation for the funds and the scale of the exchanges hosting them. Additional queries for Franklin Templeton's proposal revolve around price manipulation on the BTC market, the firm's surveillance cooperation with Coinbase assisting in price discovery and curbing manipulation and fraud, and the correlation between BTC spot and futures prices.
Unlike Franklin Templeton’s, the proposed Hashdex Bitcoin ETF architecture is more intricate, as it would be organized as a futures ETF that accommodates spot BTC. Rather than relying on a Coinbase surveillance agreement, Hashdex would procure BTC from other exchanges on the CME, basing its pricing solely on this method. The SEC queried whether the CME has significant size, considering the fund's structure and if ample liquidity will be accessible. Lastly, comments are invited to analyze Toroso Investments—the fund's managing sponsor's calculations determining the relationship between the BTC price on the CME and on unregulated exchanges.
Published At
11/29/2023 12:30:16 AM
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