Grayscale, 21Shares urge U.S. SEC to speed ETF review, allow confidential draft filings

Grayscale, 21Shares and Andreessen Horowitz (a16z), among others in the crypto industry, asked the U.S. Securities and Exchange Commission to make its review process for new exchange-traded products faster and more predictable.

On Sept. 4, blockchain outlet Decrypt reported that the industry submitted opinions focused on allowing confidential draft filings, shortening regulators’ response deadlines and permitting staking structures for spot crypto products.

The key issue is how new ETFs are reviewed. As the SEC considers how to handle new types of ETFs, it is also seeking views on whether artificial intelligence has affected the rapid mass submission of applications with similar structures. The industry has asked to be allowed to submit drafts confidentially before public filing.

Grayscale argued that such a process could reduce incentives for competitors to quickly mimic proposed products or file similar applications. It also asked that SEC staff be required to respond within 45 days. 21Shares took the same position. It pointed to the risk that competitors could rapidly copy content once an application is made public.

A16z focused on the length of the review period itself. It said procedures could be further reduced because applications are filed electronically, many disclosure formats are standardized and many questions are repeated across products. It also cited that financial markets move in shorter time units than the current review period. A16z stressed, however, that speeding up reviews should not reduce the depth of SEC scrutiny.