The U.S. Securities and Exchange Commission (SEC) announced on December 7 that it had met with Fidelity regarding the company’s spot Bitcoin ETF application.
The securities regulator said several members of the Corporate Finance Department met with members of Fidelity on the day of the notice’s publication. Various members of CboeBZX also attended the meeting.
The centerpiece of the meeting was a proposed rule change that would allow CboeBZX to list and trade shares of Fidelity’s Wise Origin Bitcoin Trust.
Fidelity’s ETF model provides exposure to the cryptocurrency through a structure involving industry players with different roles. Authorized participants and broker-dealers work with issuers and custodians to create and redeem ETF shares, facilitating market flow. Unregistered crypto affiliates hold and transfer the actual bitcoin associated with the ETF per creation/redemption order. This intermediary setup allows market participants to gain price exposure without dealing with cryptocurrency directly.
SEC met with other ETF companies
Recent reports suggest that discussions between the SEC and the applicants are now at an advanced stage and involve “important technical details.” Unnamed sources, who spoke on condition of anonymity, told Reuters that the SEC is likely to approve the relevant ETF applications soon.
The SEC itself has announced meetings with other Bitcoin ETF applicants in recent weeks. The agency’s latest meeting with BlackRock also compared cash and in-kind models.
Statements of Bloomberg ETF analyst Erich Balchunas suggested in November that cash models may be preferable to in-kind models because some brokers may find it difficult to execute Bitcoin trades under current US regulations. However, more recent reports by Bloomberg ETF analyst James Seyffart suggests some proposals will allow for both options.
Balchunas and Seyffart also estimate a 90% chance that a spot Bitcoin ETF will be approved by January 2024.
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