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SEC rethinks novel ETFs
The U.S. Securities and Exchange Commission opened a 60-day public comment period on overhauling U.S. ETF rules, including how it handles “novel exchange-traded funds involving crypto and other less traditional assets.”
“The U.S. Securities and Exchange Commission may be opening further to novel exchange-traded funds involving crypto”
SEC Chairman Paul Atkins said, “Innovation in exchange-traded funds depends on a consistent, transparent, and efficient regulatory framework,” as the agency sought input on how the ETF market can “continue to grow and innovate while serving investors effectively.”
CoinDesk said the request poses questions about how the SEC allows certain ETFs to list without requiring a complicated request for exemption, and it frames the effort as a response to market changes.
The SEC’s request also asks whether an ETF provider that doesn’t engage in traditional assets can still meet a definition as an investment company, according to the CoinDesk account.
Comment window and scope
Multiple outlets described the SEC’s review as broad and process-focused, with the consultation aimed at whether existing rules adequately cover ETFs investing in innovative asset classes or using new investment strategies.
Bloomingbit said the SEC’s comment process is intended to respond to market changes and “broadly review the standards and process for making new ETFs available to investors,” while noting the comment window is 60 days.
KuCoin’s write-up added that the SEC’s request for comment targets whether current ETF regulations cover products tied to new asset types and whether the ETF registration process itself should be adjusted as issuers launch increasingly customized strategies.
The Edge Malaysia reported that the SEC’s request asks whether there should be additional circumstances under which it could suspend the effectiveness of an ETF’s registration or otherwise intervene after a fund becomes effective, with respondents given 60 days to reply.
What could change next
The SEC review is being linked to a wider range of ETF structures, including crypto funds and other “novel” exposures, with CoinDesk saying the current process has seen growth from $4 trillion in 2019 to $12 trillion in 2025.
“from $4 trillion in 2019 to $12 trillion in 2025.”
CoinDesk quoted TD Cowen policy analyst Jaret Seiberg saying the SEC’s record-building approach could justify policy changes that would permit ETFs focused on “a broader universe of assets,” including “those based on event contracts, crypto assets and single-stock strategies.”
The Block reported that TD Cowen’s Washington Research Group, led by managing director Jaret Seiberg, said the request for comment could lead to rule changes in 2027, with the SEC permitting a broader array of ETFs including those based on event contracts, crypto assets and single-stock strategies.
In the same The Block account, SEC director of the division of investment management Brian Daly said the SEC’s request is about modernizing the ETF review process itself rather than targeting any single product category, and it highlighted that the SEC is seeking feedback on whether it should have additional authority to intervene after an ETF becomes effective.
