As a seasoned crypto investor with a keen interest in the regulatory landscape, I view Franklin Templeton’s decision to list its proposed Ethereum ETF on the DTCC website as an encouraging sign, albeit a preliminary one. The listing marks a step closer to potential trading and settlement, which could help maintain the ETF’s market price if approved by the SEC.
Franklin Templeton, a prominent asset manager, has made a notable move in the crypto sphere by making their Ether spot Exchange-Traded Fund (ETF) available for trading on the Depository Trust & Clearing Corporation (DTCC) platform.
Listing on DTCC: A Preliminary Move
As a crypto investor, I’m excited to share that Franklin Templeton’s proposed spot Ethereum ETF, with ticker symbol EZET, has made it onto the DTCC new securities list. This is an important milestone in the process of bringing this ETF to market. However, it’s essential to keep in mind that just because the ETF has been listed on the DTCC website doesn’t automatically mean it will receive approval from the US Securities and Exchange Commission (SEC). Ultimately, the SEC’s final decision will determine whether we can move forward with trading this ETF.
On the DTCC website, securities that have met certain registration or compliance standards, including ETFs, are typically featured for trading and settlement. Although this listing doesn’t influence the SEC’s ruling, it does make it easier for ETF shares to be adjusted in response to market demand. This adaptation assists in keeping the ETF’s market price aligned with its net asset value (NAV).
Franklin Templeton’s Ethereum ETF Application
In February, Franklin Templeton filed an application with the SEC to launch a Ethereum exchange-traded fund (ETF). Joining industry heavyweights such as BlackRock, Grayscale, VanEck, and ARK Invest, this move places Franklin Templeton among the major players in the ETF market. The company submitted its Form S-1 on February 12 to seek approval for a physically-backed Ethereum (ETH) ETF. If authorized, the ETF would be known as the “Franklin Ethereum ETF” and would trade on the Chicago Board Options Exchange.
As an analyst, I would rephrase it as follows: The Securities and Exchange Commission (SEC) has postponed its decision on Franklin Templeton’s exchange-traded fund (ETF) application, stating that they require more time to examine the proposed rule modification for listing and trading of shares on Cboe BZX Exchange. Consequently, the SEC now has an extended period of 45 days, ending on June 11, to complete their assessment.
Outlook for Ethereum-based Funds
The prospects for Ethereum ETFs are less promising than those for Bitcoin ETFs, according to Bloomberg ETF analyst Eric Balchunas. He predicts that the SEC’s approval of a spot Ethereum ETF in May is only about 35% likely. Balchunas believes the SEC’s hesitance could be a deliberate approach rather than just a delay, given their more active involvement in the Bitcoin ETF application process. The uncertainty surrounding Ether’s classification as a security, as expressed by SEC Chair Gary Gensler, adds another layer of complexity to the situation.
JPMorgan analysts predict that regulatory approval for a spot Ethereum ETF could be significantly delayed. Yet, they speculate that this delay might eventually yield to approval, possibly as a result of legal action akin to Grayscale’s lawsuit, which led the SEC to reconsider applications for spot Bitcoin ETFs.
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2024-04-29 16:04