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SEC votes accelerated review process: does it mean shorter wait time?
SEC votes accelerated review process: does it mean shorter wait time?
Regulation

SEC votes accelerated review process: does it mean shorter wait time?

By Giorgi Mikhelidze - 9 Jul 2020

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The US Securities and Exchange Commission (SEC) has announced that it will accelerate the review process so it will simplify the application for companies, which may lead to faster cryptocurrency and blockchain firms in a more efficient and less costly way.

In a July 6th announcement on the SEC’s website, the Commission stated that it had voted to adopt amendments to the rules to expedite the company screening process in accordance with the Investment Companies Act. 

Besides, the SEC referred to the “new unofficial internal procedure” for any other applications that do not go under this process.

The announcement said that changes had been made to the more productive application process and to provide additional transparency. The SEC declared that providing such exceptions could provide vital economic benefits to the funds and their shareholders.

Jay Clayton who is the chairman of SEC noted that the application process under the Investment Companies Act was a pivotal element of the regulatory structure. The changes approved today will ease and simplify this process, leading to increased transparency, lower costs and more efficient use of resources of the staff.

As part of the rules under the Investment Companies Act of 1940, any company applying for listing on the SEC faces a number of difficulties when working legally. The SEC asserted that these changes would come into force 270 days after they are published in the Federal Registry.

SEC: faster process for cryptocurrency funds?

The commission reluctantly subscribed to exchange-traded funds (ETFs) that trade on Bitcoin, including on the WisdomTree base in New York. Arca Labs, using ArCoin on the Ethereum blockchain, suggested that it would trade its fund through any major securities exchange registered with the SEC will not be an accessible platform.

Under the new amendments, funds, including the EFT, which require an exemption from the SEC to work, may qualify for expedited consideration. The fund will need to file a third application, “almost identical” to others who have been provided assistance for three years.

The SEC stated that in this case, the Commission will send a notification to the applicant within 45 days from the filing date of the application if the company responds within 30 days.

Reportedly, the process for reviewing a typical SEC IPO application includes three rounds of requests and lasts from one to two months. In January, the Grayscale Bitcoin Trust was the first digital asset transfer tool to introduce SEC standards after its application in November.

What is an ETF?

ETF was originally conceived as a liquid margin tool of an active investor. An ETF is immediately listed – similar to an IPO of shares. An ETF is always based on a specific index, the dynamics of which are easily tracked in real-time. As a result, the price of the ETF “part” is determined by supply and demand and is available at any time to exchange trading participants. 

The ETF industry is extremely diverse. It includes funds for stocks, bonds, securities of the commodity market, physical goods (gold, oil), foreign currencies. In addition, funds may be inverse, that is, bring investors income in the event of a fall in the price of the underlying asset. There are leverage funds that double and triple index fluctuations due to borrowed funds.

ETF stocks can be traded on the stock exchange, like ordinary stocks or futures. The value of ETFs changes throughout the day during exchange trading. An ETF is a portfolio of stocks or assets (goods, raw materials, bonds, interest rates, currencies), most often repeating a stock index. 

Giorgi Mikhelidze
Giorgi Mikhelidze

Giorgi is a Georgia software developer with two years of experience trading on the financial markets. He is now working to spread the knowledge about the Blockchain in his country and share all of his findings and research to as many crypto enthusiasts as possible.

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