SEC opens comment period for Fidelity’s proposed Ethereum ETF

The U.S. Securities and Exchange Commission (SEC) began to accept comments on Fidelity’s proposed spot Ethereum ETF through a Nov. 30 filing.

That filing indicates that the securities agency is now soliciting comments on a proposed rule change from Cboe BZX. If approved, that rule change will allow the exchange to list and trade Fidelity’s Ethereum Fund shares.

The SEC’s request for comments resembles similar filings regarding other spot crypto ETF proposals. It asks for comments about surveillance, custodianship, and market manipulation, among other matters. Notably, the filing highlights a surveillance sharing agreement that Coinbase and Cboe BZX established in June, a critical component also found in many other pending spot crypto ETF proposals.

The filing also acknowledges a lack of existing U.S.-regulated and U.S. exchange-traded investments that provide exposure to ETH, whereas European markets already offer regulated investments that provide exposure to spot crypto assets.

Decision likely by March 2024

The filing sets a timeline for the SEC to approve, disapprove, or start proceedings to determine whether to disapprove the proposed rule change. These comments are considered in the final decision-making process. The SEC is required to reach a decision within 45 days of the current notice’s publication in the federal register; however, the SEC can extend the decision period by up to 90 days and then further by 60 days if necessary.

Though exact deadlines may differ, Bloomberg ETF analyst James Seyffart estimated that the SEC’s next decision deadline for Fidelity will be Jan. 21, 2024, and its final decision will be March 8, 2024. He added that he will have knowledge of “definitive deadlines in the coming weeks.”

Fidelity initially filed for its spot Ethereum ETF on Nov. 17, days after its competitor BlackRock filed for an equivalent fund on Nov. 15. Both firms also filed for spot Bitcoin ETFs this summer starting in mid-June.

Several other asset managers, including Ark Invest, VanEck, and Grayscale, also have pending spot crypto ETF proposals.