In what can be viewed as a positive step forward for the US crypto community, the nation’s securities regulator announced yesterday that its members had voted unanimously in favour of easing its rules for “approving low-risk exchange-traded funds (ETFs)”.
The 5 member commission voted overwhelmingly in support of allowing companies to sell “vanilla versions” of ETFs without having to first seek approval from the SEC. With this change, the government body hopes to not only boost healthy competition within this market segment but also enhance innovation by lowering entry barriers.
What this really means for the market?
While this latest change has not yet received feedback from the industry at large, it will apply to all open-ended ETFs— which are essentially a type of mutual fund that do not have restrictions on the number of shares they can issue.
As things currently stand, most of today’s existing ETF companies have to work in alignment with complex financial requirements which allow a few firms to gain unwarranted competitive advantages over their contemporaries.
In relation to the issue, Democratic Commissioner Rob Jackson mentioned that he “reluctantly voted” for the rule change but remains optimistic for the future. He elaborated on his stance by saying:
“The rule would include many of the website disclosure requirements that are in existing orders such as disclosing the ETFs current net asset value per share, market price, and premium or discount – each as of the prior business day. Investors – and the asset managers who serve them – deserve a more uniform ETF regulatory framework. The time is right to codify these exemptive orders into a single rule.”
While it remains to be seen how the masses en’ large react to the SECs latest move, a spokesperson for BlackRock, Melissa Garville said that “ETFs are driving investor progress by helping tens of millions of people generate wealth and meet retirement goals.”
If that turns out to be the case, this could be the start of something big for the global crypto community at large.
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