SEC Suspends Decision On Five Bitcoin ETF Applications

The Securities and Exchange Commission (SEC) has revealed that it will suspend its decision regarding its stance on giving acceptance to a rule change in connection to five bitcoin ETF applications filed by fund provider Direxion.

The ETFs involved are Direxion Daily Bitcoin Bear 1X Shares, Direxion Daily Bitcoin 1.25X Bull Shares, Direxion Daily Bitcoin 1.5X Bull Shares, Direxion Daily Bitcoin 2X Bull Shares, and Direxion Daily Bitcoin 2X Bear Shares.

In a press release on Jan. 4, 2018, the SEC noted that NYSE Arca, Inc. submitted a filing for a proposed rule change which will allow the listing an trading of shares of the ETFs under the NYSE Arca Rule 8.200-E.

The SEC responded to this by saying that will requires additional time to evaluate the proposed changes to ensure that they meet its standards.

Signed by Assistant Secretary Eduardo A. Aleman on behalf on the SEC Division of Trading and Markets, the statement categorically puts it that the SEC is worried as to whether the changes would act according to Section 6(b)(5) of the SEC Act.

It is stated in this section that the rule of a national securities exchange must be created to “prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and to protect investors and the public interest.”

The Commission stated that in line with the provision of its enabling Act, it was required to state its decision within 180 days of the date of publication of the suggested rule change notice. That date was Jan.24, which implies that the SEC was supposed to submit its s decision on July 23.

However, it states that it is using a special extension period not more than 60 days to offer sufficient time to effectively access the proposal prior to reaching a decision. Hence the new date for its final submission regarding the ETF rule changes is 240 days from Jan. 24, which is Sept. 21.

Part of the statement states that:

“The Commission finds it appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider this proposed rule change. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,\10\ designates September 21, 2018, as the date by which the Commission shall either approve or disapprove the proposed rule change.”


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