Officials from the financial services company privately met with the lead regulator to defend the company’s Bitcoin ETP proposal.
Fidelity Investments Chairman Tom Jessup led six executives into a video conference with members of the Securities and Exchange Commission (SEC) on September 8 to explain why the regulator agreed to their exchange-traded fund (ETF) proposal. The Securities and Exchange Commission (SEC) has been slow to give the green light, as the US market still lacks nationally approved ETFs.
According to the latest documents press releases By the Securities and Exchange Commission after the meeting, the investment firm argued that there are a number of reasons to approve an exchange-traded product (ETP) as soon as possible. Fidelity noted that investors will be able to reap increased benefits from exposure to Bitcoin. According to the company, the approval will boost product innovation, also noting that as Bitcoin matures, the Bitcoin futures market at CME has matured.
Fidelity was also keen to stress that approval of an exchange-regulated Bitcoin ETP should not be conditional on the prior implementation of an ETP based on Bitcoin futures.
“We believe that a Bitcoin futures-based product is not a necessary intermediate step before using a Bitcoin ETP; companies must be able to meet investor demand for direct exposure to Bitcoin through Bill 33 Bitcoin ETPs, as the Bitcoin market matures and can support.”
Although the Chairman of the Securities and Exchange Commission last August, Gary Gensler, admitted to being fascinated by blockchain technology, he emphasized that his role is to protect the consumer. Gensler said the regulator would only consider approving the ETF if it complied with strict rules governing mutual funds or if the ETF remained limited to trading bitcoin futures.
“There are a number of mutual funds that invest in bitcoin futures on the CME. I expect there will be deposits of exchange-traded funds (ETFs) under the Investment Firms Act (Act 40). Along with other federal securities laws, The 40 Act provides significant protections for investors. Given these important safeguards, I look forward to employee review of these deposits, especially if they are limited to Bitcoin futures traded on the CME.”
Fidelity Investments is one of a dozen companies that have offered ETFs. The list also includes ARK Investment Management, VanEck, New York Digital Investment Group (NYDIG), Wisdom Tree Investments and SkyBridge, which have yet to receive approval. The product offered by Fidelity Investments is called Wise Origin Bitcoin Trust.
Nicole Abbott, Fidelity spokeswoman explained: “The growing group of investors seeking access to Bitcoin has highlighted the market need for a more diversified set of products offering digital assets to meet demand.”