Key Insights
- •The SEC has introduced new guidance allowing for the automatic approval of certain ETF filings that were delayed due to the recent government shutdown.
- •This update may facilitate the advancement of the Bitwise XRP ETF by removing bottlenecks in the SEC's review process.
- •Issuers now have the option to request expedited ETF approvals by adhering to updated SEC filing rules implemented after the shutdown.
The U.S. Securities and Exchange Commission (SEC) has released new guidance that may allow crypto ETF issuers to move forward with their filings sooner than expected. This update follows a backlog that was caused by the recent government shutdown, during which more than 900 registration statements were submitted.
Bloomberg ETF analyst Eric Balchunas noted that this change could open the door for delayed crypto ETFs to advance. He stated, "It looks like issuers can sort of speed up the effectiveness of filings in an effort to clear out some backlog," and added, "Bitwise XRP is due next up I believe."
SEC Clarifies Filing Process Post-Shutdown
While the SEC’s Division of Corporation Finance was offline during the shutdown, issuers were still permitted to submit filings. Now that the Division is back in operation, it has outlined how those filings will be handled.
Registration statements that were filed without delaying amendments will automatically become effective after 20 days, as per Section 8(a) of the Securities Act. Issuers are not required to amend these filings if the appropriate language was used at the time of submission. This provision offers a clearer path to launch for some applicants, allowing them to proceed without waiting for direct staff action.
Acceleration May Be Allowed
The SEC has also indicated that issuers can request an earlier effective date if certain conditions are met. If a delaying amendment is added before the conclusion of the 20-day period, the staff will consider requests made under Rule 461.
This option could prove beneficial for issuers who did not follow the automatic process during the shutdown. Balchunas suggested that some of these ETF filings could now "try and push out as soon as they can."
Bitwise XRP ETF Mentioned as Next in Line
According to Balchunas, Bitwise’s XRP ETF could be among the next funds to move forward. While no official timeline has been confirmed, the updated process has the potential to reduce delays if issuers act promptly and adhere to the outlined procedures.
The SEC also reminded issuers to contact their assigned office if they wish to delay their filing's effectiveness or if they need to provide updates.