SEC Evaluates ProShares Proposal for Spot Ether ETF

The United States Securities and Exchange Commission (SEC) announced on June 10 that it is currently evaluating ProShares’ application for a spot Ether exchange-traded fund (ETF). This development came just three weeks after the US SEC approved the first batch of spot Ethereum ETFs.

SEC Solicit Public Comments on ProShares spot Ether ETF

According to an updated filing, the US SEC they disclosed that the New York Stock Exchange (NYSE) Arca proposed a rule change to allow the listing and trading of shares for the ProShares spot Ether ETF.

The SEC is inviting public comments on the ETF applications, providing a 21-day window after publication in the Federal Register. This period allows stakeholders and interested parties to share their opinions, concerns, and support for the proposed ProShares spot Ether ETF.

Looks like ProShares entering spot eth ETF race…

Was always surprised they didn’t launch spot btc ETF. https://t.co/emra5j6rrz

— Nate Geraci (@NateGeraci) June 6, 2024

Once this comment period closes, the SEC enters a 45-day window to make a decision. During this time, the SEC will either approve or disapprove the applications or extend the decision-making period if further review is needed.

This process ensures a thorough and transparent review, similar to what was conducted for the first round of ETF approvals, and allows for public participation and careful consideration of all factors before the SEC reaches its final decision.

SEC Details Proposed Rule Change on ProShares spot Ether ETF

In the latest filing, the US SEC detailed that on June 6, 2024, the NYSE filed a proposed rule change under Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4. The proposed rule change aims to list and trade shares of the ProShares spot Ether ETF on the NYSE Arca under Rule 8.201-E, which governs Commodity-Based Trust Shares.

This filing is publicly available on the NYSE website, at the principal office of the Exchange, and the SEC’s Public Reference Room.

This proposed rule change is part of a broader effort to expand the financial products available on the NYSE Arca, facilitating investor access to Ethereum-based investment options through a regulated exchange platform. The SEC is now seeking comments from interested parties to evaluate the proposed rule change and its implications for the market.

Recall that on May 23, the SEC approved eight spot Ethereum ETF applications, marking a significant development in the cryptocurrency market. However, these ETFs are yet to commence live trading as they are still required to obtain the US regulator’s endorsement of S-1 registration statements.

This process is important for ensuring compliance with regulatory standards and investor protection measures. While there is anticipation that this process could be completed by July, the exact timeline remains uncertain.

Bloomberg ETF analyst James Seyffart shared his insights in a post on X regarding the ongoing Ether ETF saga, suggesting uncertainty on the launch of the ProShares spot Ether ETF.

He stated,

“SEC just added the ProShares’ Ethereum ETF Filing to its website. (That is extremely quick) Instinct initially says this won’t launch on day 1 with the other ETFs, whenever that is, but who knows? This is interesting.”

This statement implies that there may be regulatory hurdles that could delay the launch of the ProShares ETF compared to the other approved ETFs. Such delays are not uncommon in the ETF industry, as regulatory processes and market conditions can impact the timing of new product launches.