A couple of weeks after the Securities and Exchange Commission (SEC) disapproved a rule change for Commodity-Based Trust Shares to allow for the Winklevoss brothers COIN Bitcoin ETF to list on BATS Exchange, the SEC has today put out a statement denying blockchain company SolidX as well.
SolidX must have been well aware of the pending result as the company makes no mention of the fund on the company website.
The full statement from the SEC can be seen below:
NYSE Arca has filed a proposed rule change to list and trade shares of the SolidX Bitcoin Trust. When an exchange makes such a filing, the Commission must determine whether the proposed rule change is consistent with the statutory provisions, and the rules and regulations, that apply to national securities exchanges.
The Commission must approve the filing if it finds that the proposed rule change is consistent with these legal requirements, and it must disapprove the filing if it does not make such a finding.
As discussed further below, the Commission is disapproving this proposed rule change because it does not find the proposal to be consistent with Section 6(b) of the Exchange Act, which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest.
The Commission believes that, in order to meet this standard, an exchange that lists and trades shares of commodity-trust exchange-traded products (“ETPs”) must, in addition to other applicable requirements, satisfy two requirements that are dispositive in this matter.
First, the exchange must have surveillance sharing agreements with significant markets for trading the underlying commodity or derivatives on that commodity. And second, those markets must be regulated.
Based on the record before it, the Commission believes that the significant markets for bitcoin are unregulated. Therefore, as the Exchange has not entered into, and would currently be unable to enter into, the type of surveillance sharing agreement that has been in place with respect to all previously approved commodity-trust ETPs—agreements that help address concerns about the potential for fraudulent or manipulative acts and practices in this market—the Commission does not find the proposed rule change to be consistent with the Exchange Act.
