The U.S. Securities and Exchange Commission (SEC) will review the list of various Bitcoin (BTC) exchange traded funds (ETFs) reported on August 23 and their decision to reject nine applications for trading.
On Wednesday, the SEC rejected nine inquiries from three companies to bring the BTC-based ETF into the market and claimed that the products “Exchange Act Section 6 (B) (5), specifically,” require that one National Securities Exchange Regulations are designed to prevent fraud and recreational acts and practices. ”
Shortly thereafter, the SEC issued a letter stating its intention to review this decision, in which the authority was given to act on the application. However, the letters do not specify the time frame for the decision nor will the review be done.
ETFs are marketable securities that track the index, commodity or assets basket, which are proportionally represented in the shares of the fund. ETFs experience value change throughout the day because they are bought or sold on the stock exchange. If SEC allows BTC ETF, a fund buys the underlying amount of the actual BTC and distributes those funds in shares which are distributed to the shareholders further.
Last month, the SEC rejected the appeal for the Winklevoss BTC ETF fund by the Bats BJX Exchange, Inc. The first application was rejected by the SEC in March 2017 due to “roughly irregular nature of BTC markets”.
A day later, SEC Commissioner Hester M. Paris published a statement of official dissatisfaction with the disapproval of the agency of the Winklevoss fund appeal. Peirce argued that the SEC has basically missed its latest decision and the agency has eliminated its “limited role”, when it focused on the features of the built-in BTC market rather than derivatives. They suggested that the rejection order would “stop” the institutionalization of the BTC market.