Suzanne McGee and Hannah Lang
(Reuters) – U.S. securities regulators on Monday asked Nasdaq, the CBOE and the NYSE to finalize their applications to list spot exchange-traded funds (ETFs), signaling the agency may be willing to approve the applications, many people are familiar with. The process was reported by Reuters.
Securities and Exchange Commission officials asked the exchanges to submit their amendments by the end of Tuesday, two of the people said.
While exchange applications are the first step in a two-step approval process, the SEC’s green light would be a major and unexpected victory for the cryptocurrency industry, which had been expecting a waiver.
The price of ether jumped 18% on Monday and rose another 8.6% to $3,802 late Tuesday before falling slightly to hover at $3,747 Tuesday afternoon.
The SEC must decide whether to approve applications filed by the CBOE to list the Ethereum ETFs provided by VanEck and ARK Investments/21Shares by the end of this week. The Securities and Exchange Commission (SEC) had not discussed details of the filings with exchanges and issuers, and leading industry executives expected it to reject them.
But on Monday, SEC officials unexpectedly asked Nasdaq, the CBOE and the NYSE to quickly make updates and changes to the reports, requests that typically precede approval, said people familiar with the process, who declined to be named discussing private regulatory matters.
Representatives for the SEC, CBOE, Nasdaq, NYSE and 21Shares, which teamed up with ARK Investments in the case, declined to comment. ARK representatives did not respond to requests for comment.
Exchange applications require SEC approval for the rule changes required to list new products, but issuers still need the agency to approve ETF registration statements before they can begin trading.
Unlike exchange filings, there is no set time frame within which the SEC must make a decision on registration filings, meaning it could take several months for Ethereum ETFs to begin trading.
“It could take at least 60 days,” said Stephen McClurg, head of U.S. asset management at CoinShares, which launched a spot Bitcoin ETF in January but has not yet filed for an Ethereum ETF.
“These statements contain hundreds of pages of disclosure,” he said. “I can’t imagine they’ll be able to consider this for launch by May.”
The first issuers filed for spot ether products after the SEC approved ETFs linked to ether futures in October. But market participants had expected the SEC to reject applications for ether ETFs, citing frustrating and one-sided meetings with the regulator.
The US Securities and Exchange Commission (SEC), led by crypto skeptic Gary Gensler, rejected spot Bitcoin ETFs for more than a decade over market manipulation concerns, but was forced to approve them after Grayscale Investments won a lawsuit last year.
These products have attracted buying interest from a wide range of hedge funds, wealth advisors and retail investors. Two new Bitcoin funds raised more than $1 billion in assets in their first week.