SEC Opens Comment Period on Fidelity’s Proposed Ethereum ETF

The U.S. Securities and Exchange Commission (SEC) began accepting comments on Fidelity’s proposed spot Ethereum ETF with a filing on November 30th.

The filing indicates that the brokerage firm is currently seeking comments on the proposed rule changes from Cboe BZX. If approved, the rule change will allow the exchange to list and trade shares of Fidelity’s Ethereum Fund.

The SEC’s request for comment is similar to similar filings regarding other proposed spot cryptocurrency ETFs. Among other things, it asks for input on surveillance, governance and market manipulation. Specifically, the filing highlights the surveillance sharing agreement that Coinbase and Cboe BZX signed in June. This is an important component also found in other pending spot cryptocurrency ETF proposals.

The filing also acknowledges the lack of existing US regulation and US exchange-traded investments providing exposure to ETH, while European markets already offer regulated investments providing exposure to spot cryptocurrency assets.

Expected to be decided by March 2024

The filing sets out a timeline for the SEC to approve, disapprove, or initiate proceedings to determine whether to approve proposed rule changes. These comments will be considered in the final decision-making process. The SEC must issue a decision within 45 days after the current notice is published in the Federal Register. However, the SEC may extend the decision period by up to 90 days and, if necessary, by an additional 60 days.

The exact deadline may vary, but Bloomberg ETF analyst James Seyffart said: estimated The SEC’s next decision on Fidelity is due on January 21, 2024, with a final decision on March 8, 2024. He added that he would learn about the “deadline in the coming weeks.”

Fidelity first applied for a spot Ethereum ETF on November 17, a few days after rival BlackRock applied for an equivalent fund on November 15. Both companies have been filing for spot Bitcoin ETFs since mid-June this summer.

Several other asset managers, including Ark Invest, VanEck and Grayscale, are also shelving spot cryptocurrency ETF proposals.