SEC Sets Deadline for Spot Bitcoin ETF Filing Amendments on December 29

The U.S. Securities and Exchange Commission (SEC) reportedly has set a deadline of December 29, 2023 for applicants of spot Bitcoin exchange-traded funds (ETF) to submit finalize the filings.

SEC officials last Thursday met with representatives of at least seven companies hoping to launch the crypto ETFs, including BlackRock and Grayscale Investments, as well as ARK Investments and 21 Shares, Reuters reported.

In addition, representatives of the exchanges on which the new products might trade, including Nasdaq and Cboe, as well as lawyers for the issuers, also attended the meetings, according to meeting memos.

The agency is expected to decide whether to approve the joint proposal from ARK and 21 Shares by January 10 next year. Executives from two of the firms that met with regulators said that any issuer that doesn't meet that deadline of December 29 will not be part of a first wave of potential spot bitcoin ETF approvals in early January 2024.

An SEC spokesperson also added that the agency will not comment on individual filings.

So far, the regulator has received at least 13 applications for spot bitcoin ETFs from companies including BlackRock, WisdomTree, Invesco Galaxy, Wise Origin, VanEck, Bitwise, Valkyrie Digital Assets, Fidelity, as well as ARK and 21 Shares etc. At the end of August, the agency had postponed its decision​ on these companies' crypto ETF applications until October.

A number of issuers have made changes to the technical details of their ETF proposals in recent days. BlackRock and ARK both updated their filings earlier last week to allow cash redemptions at the SEC's request, according to people familiar with the matter. Besides, ARK and 21 Shares have disclosed the fee they propose to levy on their joint ETF, at 0.80%.

The final updates would also contain details about the amounts that issuers intend to use as initial investments for the new ETFs. Although these initial investments are expected to be relatively small, they are likely to increase significantly once the ETFs start trading. These initial investments, also known as "seeds," serve as the necessary capital for market makers to ensure a liquid market for the new ETFs during their initial stages.