Asset management giant BlackRock has met with the SEC again to discuss further details about the Bitcoin Spot ETF and address concerns the regulator has regarding the investment vehicle.
BlackRock and the SEC have met again to discuss further details regarding BlackRock's Bitcoin exchange-traded fund application, which has been seeking approval from the securities regulator since its filing on June 15.
The new meeting, according to the Valid identity document The SEC's release focused on details related to Nasdaq's proposed rule change for listing shares of the iShares Bitcoin Trust, one of 12 ETFs awaiting SEC approval to go public.
During this meeting, BlackRock attempted to address all of the SEC's concerns and questions regarding the Refunds in kind, i.e. in Bitcoin, which were raised at the manager’s previous meeting with the securities regulator’s trading and markets unit on the 22nd. As reported by this outlet, BlackRock is among the asset managers advocating the “repayments in kind” model within the proposed exchange-traded fund, meaning that investors will be able to be liquidated with Bitcoin, rather than cash, in exchange for their shares upon exiting the fund.
However, as noted in the recent meeting document, the SEC has several concerns regarding this reimbursement model, pointing out potential impacts and risks on the balance sheet of the market maker (MM) and on investors.
BlackRock proposes a new model for Bitcoin repayments
To address concerns raised by the SEC at the previous meeting, BlackRock introduced a new “revised” reimbursement model that could lead to lower transaction costs and reduced risks for investors and the MM-BD.
BlackRock’s proposed new in-kind redemption model is based on a “prepaid” model that the asset manager says will reduce the risks of market manipulation. In addition, BlackRock noted that this revised model can facilitate withdrawals by eliminating the need for the issuer to finance or pre-finance sales transactions, allowing for simpler and more harmonious fund operations.
Regarding this proposed new reimbursement model, financial expert attorney Scott Johnsson said that if the only problem was the market maker's balance sheet (MM-BD), then this new proposal from BlackRock should satisfy the SEC's concerns.
A new ETF applicant arrives at the SEC
To date, none of the applications to launch a spot Bitcoin ETF in the US market have been approved by the SEC. However, the securities regulator has received a new applicant: Pando Asset, a Swiss asset manager.
On November 29, Pando Asset filed an application with the SEC to create a new Bitcoin exchange-traded fund, called the “Pando Asset Spot Bitcoin Trust,” which will be listed on the Cboe BZX exchange, the largest options exchange in the country.
Gensler says he won't prejudge Bitcoin ETF
SEC Chairman Gary Gensler attended a conference hosted by the Healthy Markets Association, where he stated that he will not prejudge the process currently underway for the potential approval of a Bitcoin spot ETF.
In addition to the recently filed application by Pando Asset, the SEC is reviewing 12 other applications to launch a Bitcoin spot ETF in the United States.
Although, to date, none of these applications have been approved by the regulator, the crypto community remains optimistic, pointing to January 10 as a fairly likely date on which the SEC could end up approving several of these Bitcoin investment funds simultaneously.
In addition to BlackRock, the SEC also recently met with Invesco, as the crypto market awaits the arrival of this regulated investment vehicle to gain direct exposure to Bitcoin.
Continue reading: SEC is changing its approach to Bitcoin spot ETF, says 21Shares
