The U.S. Securities and Exchange Commission (SEC) has announced a 35-day extension in reviewing Franklin Templeton's applications for ETFs based on XRP and Solana.
Reasons for Delay
The delay, according to procedural norms, is due to the SEC opening a period for public commentary beginning June 17. This allows for a comprehensive examination of the ETF details and the operational framework of the exchange. Comments from the public are accepted within 21 days of publication in the Federal Register, followed by a 14-day response period. This process aims to incorporate a range of opinions into the SEC's final verdict.
Key Components of ETF Proposals
The proposed XRP ETF will include only XRP and cash equivalents, using the CME CF XRP-Dollar Reference Rate for valuation. A component of the Solana proposal is the staking of SOL assets, akin to stock dividends. The SEC’s scrutiny is based on Section 6(b)(5) of the Securities Exchange Act of 1934, focusing on fraud prevention and investor safeguarding. The SEC’s notice clarifies that the ongoing review does not indicate any preliminary conclusions.
Impact of Global Trends on U.S. Decisions
The lack of clarity on the ETF applications is set against a backdrop of evolving international regulations. An XRP-based ETF commenced trading on Canada’s TSX exchange recently, prompting debates in the United States about domestic introduction. The outcome of Franklin Templeton’s application evaluations could affect the wider crypto marketplace, influencing other entities to pursue similar financial instruments. The American cryptocurrency sector watches closely as the SEC’s approach—coupled with public sentiment—guides eventual decisions.
At this juncture, crucial conclusions arise: pending SEC decisions can steer the future trajectory of crypto-based financial offerings in the U.S. The public consultation process is a cornerstone for transparency and accountability. Approval or rejection of ETFs could significantly impact investor strategies and market trends.
