SEC Grants Permission for Grayscale's Digital Large Cap Fund to Engage in Trading Activities
In a significant move for the digital asset market, the United States Securities and Exchange Commission (SEC) has approved the listing and trading of the Grayscale Digital Large-Cap Fund (GDLC). The announcement was made by Peter Mintzberg, CEO of Grayscale, in a post on September 18.
The GDLC tracks the CoinDesk Large Cap Select Index, providing access to various digital assets, including Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Solana (SOL), and Cardano (ADA). Shares of the fund will trade on NYSE Arca under the ticker GDLC.
The approval of the GDLC coincides with the introduction of new Exchange-Traded Product (ETP) listing guidelines that make the process easier for issuers. Under the new system, if a product meets the requirements, the exchange can proceed with registering it without the need for a direct ruling from the SEC. This new system removes the lengthy 19(b) rule filing process, which can stretch up to 240 days, and allows ETF issuers to work directly with exchanges such as Nasdaq, NYSE, or CBOE.
The SEC's Division of Trading and Markets approved the listing after NYSE Arca submitted its rule change proposal on July 1. The new ETF listing framework is expected to speed up the path to market for new ETFs, potentially leading to a surge of new filings and launches, according to Nate Geraci, president of NovaDius Wealth Management. Geraci referred to the upcoming wave of ETFs as the "crypto ETF floodgates" about to open.
The new framework also provides mainstream access to digital assets, giving a bridge between traditional finance and DeFi. SEC Chairman Paul S. Atkins stated that the move helps to maximize investor choice and foster innovation by streamlining the listing process and reducing barriers to access digital asset products within America's trusted capital markets.
However, the SEC issued a temporary stay the following day due to internal concerns over multi-asset crypto ETFs. Grayscale filed a legal challenge in mid-August, arguing that the SEC had missed its statutory deadline under the Exchange Act. This legal challenge led to the lifting of the order and granting of full approval on September 17.
The listing and trading of p.m.-settled options on the Cboe Bitcoin U.S. ETF Index and the Mini-Cboe Bitcoin U.S. ETF Index, including third-Friday, nonstandard, and quarterly expirations, has also been given the green light. The new ETF listing framework is expected to increase innovation in the digital asset market.
In conclusion, the approval of the Grayscale Digital Large-Cap Fund marks a significant step forward for the digital asset industry, potentially leading to increased innovation and mainstream access to digital assets. The new ETF listing framework is expected to speed up the path to market for new ETFs, making it easier for issuers to bring their products to market and giving investors more choices in the digital asset space.
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