The U.S. SEC has approved proposed rule changes by Nasdaq and Cboe BZX to list and trade the Hashdex Nasdaq Crypto Index US ETF and the Franklin Crypto Index ETF, respectively. This approval under Section 19(b)(2) of the Exchange Act includes accelerated processing for the Franklin exchange-traded funds (ETF). Both the ETFs will offer exposure to crypto assets under their respective frameworks.
As per the filing, the Commission has determined there is sufficient reason to approve the Franklin Filing before the 30-day notice period ends. The amendment clarified details about the Trust, aligned its terms with BZX’s listing standards, and matched representations made for other approved ETPs.
The Commission found proposed changes consistent with the Exchange Act and applicable regulations for a national securities exchange. The proposals were compliant with Section 6(b)(5) of the Exchange Act, which requires that rules be designed to prevent fraud and manipulation, protect investors, and serve the public interest. They were found to be in alignment with Section 11A(a)(1)(C)(iii), which emphasizes the importance of transparency and the availability of information about securities transactions.
In previous approvals for Bitcoin and Ether ETPs, the Commission found that surveillance-sharing agreements with the CME (Chicago Mercantile Exchange) were adequate because of the high correlation between CME futures markets and the spot markets for Bitcoin and Ether. This allowed for effective surveillance of fraud or manipulation across both markets.
The Commission confirmed that the spot markets for Bitcoin and Ether remain highly correlated with CME futures, and the exchanges’ surveillance-sharing agreements with the CME will help prevent fraud and manipulation.
The Commission also concluded that the proposals are designed to promote fair and transparent trading, prevent manipulation, and protect investors, similar to other approved exchange-traded products (ETPs).
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