The Securities and Exchange Commission (SEC) has given the nod to Grayscale’s Bitcoin Mini Trust ETF, allowing it to be listed and traded on NYSE Arca. The SEC’s decision comes after a thorough review process.
The approval process was detailed and involved several key components. The SEC evaluated whether the proposal met the standards in the Securities Exchange Act, particularly Section 6(b)(5).
It requires that the rules of a national securities exchange be designed to prevent fraud and manipulation and protect investors and the public interest.
One important aspect of the approval was the establishment of a comprehensive surveillance-sharing agreement between NYSE Arca and a regulated market of significant size.
This agreement is needed for detecting and deterring fraudulent activities related to the underlying assets, in this case, Bitcoin.
The SEC, however, said that this is not the only way to meet the regulatory requirements, but it is a big factor in their approval.
Listing and trading conditions
The SEC’s approval also outlined the conditions under which the Grayscale Bitcoin Mini Trust can be listed and traded.
These include requirements for transparency in portfolio holdings, pricing information, and the dissemination of intra-day indicative values.
The ETF must provide real-time pricing information via the Consolidated Tape Association and ensure that this information is accessible to the public.
Additionally, the proposal includes measures to ensure that the shares of the Bitcoin Mini Trust are treated as equity securities, subjecting them to the existing rules governing equity trading on NYSE Arca.
The SEC emphasized the importance of these measures in promoting fair disclosure of information, preventing trading when transparency cannot be assured, and safeguarding material non-public information. These help in maintaining a fair and orderly market for the shares of the trust.
