ETF Giants Clash Over Confidential Filings and Approval Speed

The U.S. Securities and Exchange Commission (SEC) has published responses to its request for comment on 'Novel ETFs', which include funds that hold unusual assets or offer less common strategies, including investments in crypto assets.

The debate over public versus confidential filings cuts both ways. On one hand, Grayscale, A16z, and the Crypto Council for Innovation (CCI) want a confidential filing period to reduce imitative or duplicative registration statements, citing AI-powered copycats.

On the other hand, Charles Schwab opposes a fully confidential filing process, arguing that public filings allow them to prepare for upcoming ETFs, including educating their investors. However, they suggested a compromise: if confidentiality is introduced, the filing should be public for at least 75 days before the fund becomes effective.

The second major difference emerges in the speed of the approval process. Grayscale and A16z want a shorter wait and a 45-day deadline for the SEC to respond, while Jane Street opposes a quicker process, arguing that it might create low-quality, less competitive, and less liquid investment products.