According to an official statement pressed by the SEC, the U.S. Securities and Exchange Commission (SEC) has postponed its decision on the listing and trading of a bitcoin exchange-traded fund (ETF) matter until 30th of September, which would have allowed the Chicago Board Options Exchange to offer an ETF.
An exchange-traded fund (ETF) is basically an investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds and generally operates with an arbitrage mechanism designed to keep it trading close to its net asset value, although deviations can occasionally occur.
Sponsored by an investment firm VanEck and a financial services company SolidX, the fund under consideration is expected to get listed on the Chicago Board of Exchange (CBOE). With only two more months left for the SEC to consider the proposed rule change offered by CBOE Global Markets Inc., there is not much waiting for the fund to know whether they are to be listed or not.
Not only has the SEC received more than 1,300 comments on the proposal put forward, according to today’s notice, but also on the trade shares of SolidX bitcoin shares that were released by the VanEck SolidX Bitcoin Trust. According to the document, should the commissioning authorities see the proposal of mass, they will release within 45-90 days of margin a decision on its future; they might even extend its period of consideration.
The document states:
Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,6 designates September 30, 2018, as the date by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change (File No. SRCboeBZX-2018-040).
The funders VanEck and SolidX first announced the physically-backed bitcoin ETF on June 5. The value of each of their shares was set to be $200,000, as per the SEC filing. In addition to this, CEO Daniel H. Gallancy of SolidX dialogued to CNBC that the high shares echo the fund’s intention to circle around the institution instead of retail investors.
In reaction to this delay, bitcoin prices pushed further down today. If approved, these shares would have been pressed by VanEck SolidX Bitcoin Trust, which can be rounded to 25 bitcoin each.
The shares would be “more geared towards institutional investors,” says Scott Weatherill, chief risk manager of B2C2 Japan., was the rule proposal passe already.
Not only did SEC delay its decision on the rule proposal, but it also postponed its decision on the investment firm Direxion’s application for a bitcoin ETF until the 21st of September, just last month. On top of that, the regulator turned down an appeal from Bats BZX Exchange, Inc. which pleaded to trade and list shares of the Winklevoss Bitcoin Trust, originally accounted in 2016, too.
The agency gravitated its main reason for refusal of the application to the largely unregulated nature of bitcoin markets. It was stated:
When the spot market is unregulated — there must be significant, regulated derivatives markets related to the underlying asset with which the Exchange can enter into a surveillance-sharing agreement.