VanEck, SolidX to Sell ‘Limited’ Bitcoin ETF to Institutions
Sarah Tran Sep 04, 2019 03:12
VanEck and Solid X revealed that they have a workaround to bypass regulatory issues and are using an SEC exemption that will allow their product to be offered to institutions such as hedge funds and banks, but not to retail investors.
While the United States Securities and Exchange Commission (SEC) once again delayed the decision regarding the Bitcoin exchange-traded funds (ETFs), the investment management firms are planning to sell a “limited version” to institutional investors on Sep 5th.
VanEck and Solid X revealed that they have a workaround to bypass regulatory issues and are using an SEC exemption that will allow their product to be offered to institutions such as hedge funds and banks, but not to retail investors.
An “unusual” arrangement is under the SEC Rule 144A allows the sale of privately placed securities to “qualified institutional buyers,” as reported by the Wall Street Journal.
Although the product is not a true ETF, it is similar. Head of ETF product of Van Eck, Ed Lopez mentioned that the offering “allows for shares to be created and redeemed like ETFs, but it is not an ETF.”
“Unlike an ETF it isn’t listed on a national exchange, rather it is quoted on the OTC Link ATS platform. This is a first-of-its-kind type of offering. Given it will trade over-the-counter via broker-to-broker transactions, we’ve been casually referring to it as a Broker Traded Fund, a BTF.”
VanEck and SolidX believe that this limited version will act as evidence that Bitcoin ETF can work.
