Applicants quickly responded to the SEC’s comments on Form S-1 in preparation for approval of a possible spot Bitcoin ETF.
Both VanEck and BlackRock have filed amended Form S-1 for their spot Bitcoin ETF offering after addressing recent opinions from the U.S. Securities and Exchange Commission (SEC). The board set a Monday deadline for applicants to submit revised forms as the approval or rejection deadline approaches.
After receiving the revised form, the SEC added a comment, a minor note about the applicant’s prospective ETF. According to the report, the forms currently submitted by applicants show several changes, including details on the steps required if a counterparty or authorized participant becomes insolvent, noting possible conflicts of interest. There was also a cautionary note warning potential investors of possible liquidity impairment.
S-1 Form May Not Delay SEC Spot Bitcoin ETF Approval
While some noted that the SEC’s comments may have been an attempt at delaying tactics, others disagreed. According to Fox Business producer and journalist Eleanor Terret, if committee members exercise their rights under 17 CFR section 201.431, which allows committee members to request review and votes with or without approval through delegated authority, the SEC will Approval may be postponed.
Bloomberg ETF analyst James Seyffart said the SEC’s latest move may not mean a delay. Seyffart believes the speed with which the SEC is reviewing filings and issuing comments suggests the commission is interested in approving a spot Bitcoin ETF. Scott Johnsson, general partner at Van Buren Capital, agrees with Seyffart. Johnson added that amending details on the S-1 form may not affect 19b-4s approval.
Fee Structure and Exemptions
Recent amendments to Form S-1 emphasize the fee structure. For example, Bitwise charges no fees for the first six months or until the asset value reaches $1 billion, after which it charges 0.24%. Ark/21Shares follows the same trend but holds 0.25% or $1 billion in assets after the first six months. For BlackRock, the fee is 0.2% for the first 12 months or $5 billion in assets and 0.3% thereafter.
Last week, Galaxy and Fidelity also revealed their fee structures. Fidelity’s fee is 0.39%, while Galaxy/Invesco plans to waive the first six months and charge 0.59% thereafter. The fee waiver may not mean much, according to Bloomberg ETF analyst Eric Balchunas. at post, Balchunas explained that these exemptions have historically not “moved the needle much” because investors typically receive them over a long period of time. As a result, investors tend to focus more on regular fees rather than fee waivers or initial low figures.
Before a prospective issuer can offer an ETF to the public, the SEC must approve both Form 19b-4 and Form S-1. Simply put, 19b-4 is for SEC approval and S-1 allows for public sale of the product.
The SEC’s first deadline is Wednesday, when a decision on ARK/21Shares is expected. Speculation suggests that the committee may approve more than one ETF on the same day instead of focusing only on ARK/21Shares.
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