Asset Managers Promote SEC Recovery of “First to Document” Principle – Details
Asset Manager Vaneck, 21shares and Canary Capital have jointly contacted the Securities and Exchange Commission (SEC) to seek the recovery of the first-to-document principle, namely ensuring that regulatory approaches to exchange trading products (ETP) applications (ETP) applications are reviewed and approved. The trio of the famous investment firm claims that the committee recently detached from the standard, killing innovation and creating an uneven playing field, among other negative consequences.
SEC’s principle signal transition from “first to first”: ETF issuer
In an email to SEC Chairman Paul Atkins on June 5, Vaneck’s CEO, 21shares and Canary Capital in Jan van Eck, Duncan Moir and Steven McClurg outlined the serious complaints of the commission’s abandonment of its first expiration principle and the method of synchronous approval of recent ETP applications.
The letter explains that the “first to document” rule acts as a strong pillar of equity in supporting innovation and is also the first advantage gained. This approval model is said to create a highly competitive market landscape as smaller asset managers are able to capture a large market share of a particular product to improve their general position.
A statement in the letter states:
…If multiple sponsors work in parallel on similar ideas, the first submission is first recognized by the market. This allows the ETP industry to grow to $15.4 trillion in investor assets. New innovative companies like WisdomTree have been able to become industry leaders. It does not necessarily establish mutual fund companies that gain high ETP market share.
But Vaneck, director of 21shares and Canary Capital, explained that the simultaneous approval method seen by the SEC shift to 2024 Bitcoin Field ETFs and Ethereum ETFs has completely undermined the need for innovation in the ETP industry. They also strongly claim that this approach has a preference for larger asset managers for products that are able to comfortably replicate other companies’ products and guarantee ensures that the same release date is ensured from the committee.
Van Eck, Moir and McClurg acknowledged potential reasons for the simultaneous approval, such as reducing the workload of committee employees, but they believed that the “first pair of documents” was an integral part of maintaining the regulatory integrity of the U.S. ETP market. They urged a rapid resumption of this governance standard, which they claim will ensure financial innovation, creativity and competition.
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