US SEC Says it Will Review the Latest Round of ETF Rejections
The U.S SEC has announced that it will review its recent rejection of nine Bitcoin ETF's.
The U.S SEC has announced that it will review its recent rejection of nine Bitcoin ETFs. This decision has taken many by surprise as it comes barely 24 hours after the SEC decided to reject the ETF applications by ProShares, Direxion, and GraniteShares.
The nine Bitcoin ETFs pending further review
The SEC has revealed, in an unexpected announcement, that it “will review the delegated action” of the Division of Trading and Markets regarding the 9 denied ETF applications. The orders will be reviewed and the commission will present its own decision.
SEC Commissioner Hester Peirce made this known to the public via Twitter. She tweeted that:
Yesterday’s staff orders disapproving SRO rules related to a number of bitcoin ETFs are stayed pending Commission review. See, for example: https://t.co/Ky9Z8t1E4q
— Hester Peirce (@HesterPeirce) August 23, 2018
The commission issued an order on Wednesday rejecting Bitcoin ETF applications submitted by ProShares, GraniteShares, and Direxion. The three of them submitted a total of nine ETF proposals.
The rejections were drafted and issued by staff granted power on behalf of SEC (Division of Trading and Markets).
Pierce explained in her statement that the commission has the power to delegate such task to its staff. The SEC could also decide to review the decision made by the staff, which in this case they have decided to do.
SEC Secretary Brent Fields sent a letter to NYSE Group counsel Eugene Schlanger, stating that:
This letter is to notify you that, pursuant to Rule 43 1 of the Commission’s Rules of Practice, 17 CFR 201.431, the Commission will review the delegated action. In accordance with Rule 43 1 (e), the August 22 order is stayed until the Commission orders otherwise.
The Office of the Secretary will notify you of any pertinent action taken by the Commission.
NYSE wasn’t the only one that received the letter. ProShares and GraniteShares received similar notifications. SEC gave reasons for its decision to reject the proposals earlier.
It stated that the exchanges haven’t met their burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of the Exchange Act.
The SEC rejected the Winklevoss ETF and others due to concerns that the Bitcoin market is still prone to price manipulation. The lack of regulation in the market has been a cause of concern for the SEC.
Hester Peirce tagged the crypto community SEC hero
Pierce has been dubbed as the crypto mum. The SEC commissioner has been in support of Bitcoin ETFs since the beginning as she believes it will be in the best interest of the cryptocurrency industry.
She has gained support and appreciation from cryptocurrency enthusiasts after Peirce dissented from the SEC’s rejection of the Winklevoss-backed Bitcoin ETF a few weeks ago.
Back then, she tweeted that:
Apparently, bitcoin is not ripe enough, respectable enough, or regulated enough to be worthy of our markets. I dissent https://www.sec.gov/news/public-statement/peirce-dissent-34-83723 …
VanEck & SolidX ETF decision set for September 1
Despite the SEC delaying its decisions for VanEck and SolidX, there is optimism that the SolidX Bitcoin Trust will be approved by the commission. The SEC has slated September 1 as the day it will make its decision.
The cryptocurrency market has yet to react to the earlier news of rejection and this latest one, with Bitcoin still trading above the $6,500 mark.