The Securities and Exchanges Commission (SEC) on Thursday approved 19b-4 forms filed by issuers looking to launch a spot ether exchange-traded fund (ETF), marking a key step forward in bringing the fund on the market, according to an order that was published on the SEC's website before being pulled down.

The form approval is just the first of two major steps the SEC needs to take before any spot ether ETFs can actually begin trading. S-1 forms, which are necessary to publicly offer new securities, also need approval.

Self-regulatory organizations such as exchanges have to file the 19b-4 forms in case of a rule change, while issuers file the S-1 forms.

In a statement, a Grayscale spokesperson confirmed the regulator had approved its 19b-4.

"At Grayscale, we appreciate the opportunity to engage constructively with regulators as they review spot Ethereum ETFs, and we remain optimistic about the potential of bringing Ethereum further into the US regulatory perimeter in the ETF wrapper," they said.

Potential issuers include BlackRock, Fidelity, Grayscale, VanEck, Franklin Templeton, Ark/21Shares and Invesco/Galaxy.

“A week ago I would’ve said you were a little crazy to think that these ETFs were going to get SEC approval,” said James Seyffart, ETF analyst at Bloomberg Intelligence ahead of the decision.

Although the approval of the 19b-4 filings suggests that regulators are willing to allow issuers to bring a spot ether ETF on the market, it doesn’t guarantee that they will ultimately approve the final S-1 forms filed by all issuers.

“There is likely to be a gap before we see S-1 approvals and these ETFs begin trading. My guess is that this will take at least a week, but likely more. If history is any guide it could be much longer and be measured in months. But I personally think the gap will be measured in weeks. Everyone is just guessing right now though.” Seyffart said.

Regulators sent a shock wave through the industry on Monday when reports came out that issuers were asked to update their 19b-4 filings ahead of the SEC’s deadline to approve or deny one of the issuers, VanEck’s filing.

The odds that the SEC would approve the filing were very low given the lack of engagement from the regulator in the weeks before.

An SEC spokesperson said the agency would not comment beyond what's in the order published Thursday.

UPDATE (May 23, 2024, 21:30 UTC): Adds additional information, including SEC statement.