- Both firms intend to launch a new offering that is just like Bitcoin ETF but doesn’t need to follow SEC’s regulatory.
- The new product is coined as BTF (Broker Traded Fund), which is inspired by ETF
VanEck Securities, a U.S investment management firm, and SolidX Management, which earlier had a verdict postponed by the U.S. Securities and Exchange Commission (SEC) on their proposed bitcoin ETF – recently revealed that they have found a workaround for bypassing the regulatory hurdles.
As per reports, the companies might use an exemption levied by the SEC that will permit them to offer shares in their VanEck SolidX Bitcoin Trust to institutions like banks and hedge funds, excluding retail investors. Although it cannot be classified as an exchange-traded fund, but the product is alike.
Speaking on the move, Ed Lopez, VanEck Securities’ Head of ETF product, said that the offering enables shares to be redeemed and created like ETFs, even though it’s not an ETF. He added that the offering is quoted on the OTC Link ATS platform, rather than listing it on a national exchange like an ETF, making it a first-of-its-kind type of offering.
The transaction will be traded over the counter through broker-to-broker transactions, eventually referring it to as a BTF or a Broker Traded Fund, Lopez said.
Reportedly, the company will be able to sell the shares under the SEC’s Rule 144A, which would let privately placed securities to be traded along with the qualified institutional buyers that have a shorter holding periods and do not require SEC’s registration.
Moreover, the companies say that the shares will offer institutional investors a physically backed bitcoin product which can be tradeable through prime and traditional brokerage accounts. For the record, the shares are the first institutional-quality, cleared product offering exposure to bitcoin and allowing a traditional ETF creation-and-redemption process.