Three asset managers — VanEck, 21Shares, and Canary Capital — have co-signed a letter urging the SEC to revive its conventional “first-to-file, first-to-approve” normal for exchange-traded merchandise.
The letter, revealed on VanEck’s official X account on June 6, expresses concern over the latest departure from its conventional apply of approving ETPs within the order they have been filed.
The Fee has adopted a simultaneous approval course of, which, in keeping with the fund managers, has deprived smaller corporations and stifled innovation within the $15.4 trillion US ETF market.
“When the Fee performs favorites, it prices ETP sponsors cash and makes the ETP market much less truthful,” the businesses said of their joint letter.
The corporations famous the launch of the Bitcoin futures ETF in late 2021, the place ProShares secured over 90% of market share with only a three-day head begin.
In addition they pointed to the January 10, 2024, simultaneous approval of spot Bitcoin ETPs, the place they are saying the most important corporations have gained dominant market share regardless of submitting later than others.
“This important regulatory shift away from a first-to-file approval precept adversely impacts market dynamics in a number of vital methods,” the letter said. “It incentivizes replication relatively than authentic innovation, thereby discouraging the appreciable funding essential to develop genuinely progressive merchandise.”
In January 2024, the SEC permitted all 11 spot Bitcoin ETFs concurrently, disregarding the order by which the issuers had filed their purposes.
Just a few months later, the regulator adopted the identical strategy with spot Ethereum ETFs, granting joint approval to all energetic filings no matter submission timing.
VanEck and 21Shares have been among the many earliest corporations to file for each spot Bitcoin and Ethereum ETFs, enjoying a pioneering function in bringing digital asset publicity to the US market.
Following these milestone approvals, each corporations, together with Canary Capital, shortly moved to guide the following wave of filings for various crypto asset ETFs.
Canary Capital, particularly, made an early push into the altcoin ETF area, submitting proposals for a staked TRON ETF, a Cronos ETF, and different area of interest crypto merchandise.
Nonetheless, regardless of early efforts by these issuers, the SEC’s latest precedent means that simultaneous approval, relatively than first-to-file prioritization, could once more be the result, ought to the Fee resolve to greenlight further crypto ETPs.
Over the previous a number of weeks, the SEC has delayed choices on a number of altcoin ETF purposes, together with these tied to Solana, XRP, and Litecoin, amongst others.
Bloomberg Intelligence’s newest projections place the approval odds for Litecoin and Solana ETFs at 90% this 12 months, with XRP ETFs not far behind at 85%.
