SEC Begins Review Process Of VanEck-SolidX Bitcoin ETF Proposal

News, Regulation | September 21, 2018 By:

The US Securities and Exchange Commission (SEC) has begun proceedings to determine whether to approve or disapprove the bitcoin exchange-traded fund (ETF) proposed by investment firm VanEck and financial services company SolidX.

The proposed bitcoin ETF was initially filed on June 6 by CBOE BZX Exchange. The exchange proposes to list and trade the shares of the VanEck Solidx Bitcoin Trust under BZX Rule 14.11(e)(4), which governs the listing and trading of commodity-based Trust Shares on the exchange. Each share will represent a fractional undivided beneficial interest in the trust’s net assets. SolidX will be the sponsor of the trust, which will be responsible for custody of the trust’s bitcoin. While VanEck will provide assistance in the marketing of the shares.

As of September 19, the SEC said it has received more than 1,400 comment letters on the proposed rule change. But the agency wants more feedback from the public addressing the sufficiency of the BZX’s statement in support of the proposal. The SEC is seeking views on eighteen key issues, including market manipulation and surveillance.

“The commission is instituting proceedings to allow for additional analysis of the proposed rule change’s consistency with Section 6(b)(5) of the Act, which requires, among other things, that the rules of a national securities exchange be ‘designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade,’ and ‘to protect investors and the public interest’,” the SEC said.

Last month, the SEC rejected nine proposed bitcoin ETF proposals – five crypto ETFs from Direxion, two from GraniteShares and two from ProShare – claiming that the products did not comply with the requirements by the “Exchange Act Section 6(b)(5). Shortly after, the agency released letters stating that senior SEC officials will review the disapproval orders. However, the letters did not specify when the review will be completed.