ETF Issuers Urge SEC to Follow Filing Order
ETF issuers Vaneck, 21shares, and Canary Capital have reached out to the Securities and Exchange Commission (SEC), asking it to return to the “first file” principle regarding the approval of ETF applications. They believe that not following this principle since the launch of crypto ETFs has hindered competition and stifled financial innovation.
In their letter, they express concern about how this approach reduces incentives for developing new products, which could ultimately compromise investor choice and market efficiency. The letter states:
“Reducing pioneering incentives in product development has broader implications: fundamentally undermines the committee’s mission of reducing investor choice, compromising market efficiency, protecting investors, maintaining a fair, orderly, efficient market and promoting capital formation.”
The letter emphasizes that the U.S. can maintain its leadership in financial innovation through a regulatory framework that encourages entrepreneurship, creativity, and genuine innovation.
As a result of the anticipated changes in regulatory environments, submissions for digital asset ETFs have surged, with asset managers and crypto companies eager to gain approvals for new investment products.
SEC Delays Decisions on Staking and Altcoin ETFs
While there is growing institutional interest in Altcoin and staking ETFs, the SEC has postponed decisions on several of these applications. In May, they delayed a decision on Grayscale’s Spot Solana (Sol) Trust ETF until October.
SEC officials also held off on the approval of staking and XRP ETFs that same month, a move that analysts found expected. Bloomberg ETF analyst James Sefert noted on May 20 that the SEC typically takes time to respond to filings for the 19B-4. He mentioned that most of these submissions have their deadlines in October, making early decisions unusual.
Moreover, the SEC has raised concerns about the structure of Rex-Soprey Staked ETFs, suggesting that it may not meet the qualifications required for ETFs. This has further delayed the launch of these investment products, despite many analysts believing that an effective registration statement indicated an imminent launch.
