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SEC Adopts Expedited Public Listing Review Process—Blockchain ETFs Could Qualify

Lucas Cacioli   Jul 07, 2020 07:00 2 Min Read


   

The United States Securities and Exchange Commission has voted to adopt rule amendments to expedite the review procedure for companies applying for public listing.

The Securities and Exchange Commission (SEC) announced on July 6, that it had voted to adopt rule amendments to establish an expedited review procedure for investment companies under the Investment Company Act. The new process could potentially include streamlining crypto and blockchain exchange-traded fund (ETF) applications and should provide more “certainty and transparency regarding the process” for these firms.

The regulators declared that the expedited review process will be available for applications that are substantially identical to two other applications for which an order granting the relief has been issued within three years of the date of the application’s initial filing. Additionally, the SEC also referenced a new internal procedure for applications that did not qualify for the new expedited review process.

“The application process under the Investment Company Act is an important component of our regulatory structure. The process provides economic benefits to fund shareholders, expands investor choice, and facilitates innovation in the asset management industry, all with a steadfast commitment to transparency and investor protection,” said SEC Chairman Jay Clayton. “The changes approved today will modernize and streamline this process, resulting in improved transparency, reduced costs, and a more efficient use of our staff’s resources.”

The SEC said the changes would be in effect 270 days after being published in the Federal Register.

Months to Days For Crypto ETF Review

The SEC has been notoriously opposed to approving Bitcoin ETFs, which has drawn the ire of those within its ranks. Wilshire Phoenix recently sought approval for its Bitcoin Exchange-Trade Fund, an application that was rejected by SEC in February 2020. The Exchange-Traded Fund proposed to hedge Bitcoin against US Treasury bills.

The SEC’s newly adopted amendments that will come into effect—mean that crypto and blockchain ETFs that have required an exemption from the regulators for their operations in the past could qualify for the new review process. However, the fund would need to file a third application “substantially identical” to others that were granted exemption within three years of the date of the application’s initial filing.

While traditionally the review process for a typical IPO application with the SEC entails three rounds of inquiries and lasts between one and two months. In the case of the expedited review, the Commission would provide a notification to the applicants within 45 days of the date of filing provided the company responds within 30 days.

 


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