It has been just revealed that Fidelity held a meeting with the SEC about Bitcoin fund. Check out more details about this below.
Fidelity meets with the SEC
On December 7, asset management company Fidelity held a meeting with the Securities and Exchange Commission to discuss their proposed spot bitcoin ETF.
The regulator’s website has a memo that mentions this meeting.
As part of their presentation, Fidelity shared a document titled “Bitcoin BTC ETF Workflows” that included slides detailing the “In-Kind” creation and redemption models.
“Arbitrage and hedge are more efficient with physical creations,” the presentation stated. “Self-clearing ETF market maker firms can facilitate efficient arbitrage in acting as Agency AP for non-self-clearing ETF market maker firms with Crypto Affiliates. Allowing for physical creation and redemption is critical to enhance trading efficiency and secondary market pricing for all participants.”
The price of Bitcoin has seen a significant rise in the last few weeks. This has been due to the market anticipating a decision from the SEC regarding applications for proposed spot ETFs.
Regulators and asset managers have been working on multiple amendments to filings and memos about meetings. They have been focusing on technical aspects of how the proposed funds would work if they are approved.
“Create/redeem language includes both in-kind and cash still,” Bloomberg Intelligence analyst James Seyffart wrote on X earlier Friday, commenting about an amended filing for VanEck’s proposed spot bitcoin ETF. “Looking more and more like everyone will leave that optionality in their S-1’s but 19b-4 approvals may only allow cash creates — at least to start.”
“Here’s key disclosure on this workflow: ‘Note: Registered Broker Dealer entities do not touch the coin in any workflow,’” Nate Geraci, president of the advisory firm The ETF Store, wrote on X. “That’s clearly the SEC’s concern.”
On November 28th, BlackRock had a meeting with the SEC to discuss its proposed spot bitcoin ETF. During the meeting, the asset manager presented a “Revised In-Kind Model Design.”
In a presentation submitted to the SEC, BlackRock stated that during a previous meeting with Trading & Markets staff on November 20th, the SEC had certain unresolved questions about the In-kind model.
Specifically, the SEC had concerns regarding the balance sheet impacts and risks to the Market Maker’s U.S. Registered Broker/Dealer entity (“MM-BD”), as distinct from the Market Maker’s unregistered entity (“MM-crypto”), during the redemption flow.
