Three asset managers, VanEck, 21Shares, and Canary Capital, have filed a joint letter to the US SEC, requesting the reinstatement of the 'first-to-file' rule for exchange-traded products (ETPs).
Appeal to the SEC
The letter, posted on VanEck's official account on X on June 6, criticizes the SEC's trend of granting approval to multiple crypto ETFs simultaneously instead of respecting the order of applications.
Examples of Unfairness
The fund managers argue that the new approval style gives larger companies an unfair edge. The letter states, 'When the Commission plays favorites, it costs ETP sponsors money and makes the ETP marketplace less fair.' They cited the 2021 launch of the first Bitcoin futures ETF approved for ProShares, which captured over 90% market share shortly after release.
Potential Consequences
The authors of the letter warn that the shift in process may discourage firms from developing new products if early filing no longer has strategic benefits. Currently, the SEC has delayed decisions on multiple filings for altcoin ETFs such as Solana, XRP, and Litecoin.
The asset managers' appeal to the SEC underscores the importance of maintaining fairness in the ETF approval process to foster innovation and competition in the market.
