Most ETFs are registered under the Investment Company Act of 1940. These ETFs have a fairly simple path to approval:
- The issuer files an application with the SEC, and after 75 days the application automatically becomes effective unless the SEC blocks it. All.
Spot Bitcoin ETFs, like all spot commodity ETFs, are filed under the Securities Act of 1933.
- A key feature of the structure of the 1933 Act is that applications submitted do not automatically take effect after 75 days. Instead, the SEC must approve the application under the “1933 Act” before it becomes effective, which typically takes up to 240 days.
What is the process for reviewing an application under the 1933 Act?
- The process of reviewing an application under the 1933 Act follows a specific schedule. First, the ETF issuer files a prospectus with the SEC describing the fund it wants to launch.
-The stock exchange on which the ETF will be traded (such as the NYSE) then files a "19b-4" filing. Filing a 19b-4 is an application to the SEC to allow the ETF to be listed and traded on an exchange.
- Within 15 days of filing a 19b-4 filing with the SEC, it is published in the Federal Register, an official record of U.S. government actions. From then on, the SEC has up to 240 days to approve or reject it.
- It should be noted that the transition of an application from one stage to another does not mean that the likelihood of its approval increases. Therefore, when the SEC extends the deadline for reviewing an application, it should not be taken in a positive or negative light. It's just part of the process.