The SEC has announced its consideration of proposed next steps franklin templeton and Hash index Spot Bitcoin (BTC) Exchange Traded Fund (ETF) bids.
The agency has requested written comments on both proposals to approve or deny the applicant’s Form 19b-4.
SEC Form 19b-4 is a public disclosure approved by the SEC’s Division of Trading and Markets independently of Form S-1, while a prospectus is subject to approval by the company’s finance department. The SEC’s request is open for comment and response comments for 35 days from the date it is published in the Federal Register.
The proposed rule change (actually an application) to allow ETF trading was submitted at the end of September. The Hashdex ETF will trade on the New York Stock Exchange Arca and the Franklin Templeton Exchange on Cboe BZX. On November 15, the SEC extended the deadline for making a decision on the application.
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These questions relate to issues related to potential ETF approval. We invite commenters to evaluate the susceptibility of these funds to manipulation and whether the exchanges hosting these funds are of considerable size.
Franklin Templeton’s commenters were also asked to consider price manipulation in the BTC market, the company’s monitoring sharing agreement with Coinbase, which will aid price discovery and complement efforts to detect manipulation and fraud, and the relationship between BTC spot and futures prices. correlation.
SEC extends comment window for Franklin Templeton, Hashdex #bitcoin ETF pic.twitter.com/aEYTa5Yg1n
— Daniela (@DeFinanzasYT) November 28, 2023
The fund structure proposed by Hashdex is more complex than Franklin Templeton’s. Its proposed Hashdex Bitcoin ETF would be structured as a futures ETF holding spot BTC. Instead of relying on Coinbase to monitor the sharing protocol, Hashdex purchases BTC from other exchanges on the CME and relies entirely on that mechanism for pricing.
The SEC asked whether CME was large and had sufficient liquidity given the fund’s structure. Finally, commenters were asked about sponsor Toroso Investments’ calculations to determine the relationship between BTC prices on CME and unregulated exchanges. The sponsor manages and controls the fund.
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