The Crypto Council for Innovation is calling on the SEC to modernize the regulatory framework for exchange-traded products, arguing that non-ETF products should receive approval efficiencies similar to those already available to ETFs.
In comments submitted Aug. 31 on the SEC’s proposed framework for Novel ETFs, CCI said the agency should create more efficient and predictable paths to market for all ETPs, including products providing exposure to crypto assets, blockchain opportunities and event contracts. The group said extending mechanisms such as automatic effectiveness and clearer timing standards would improve regulatory parity while encouraging competition and innovation.
CCI specifically highlighted Rule 6c-11, which allows qualifying ETFs to operate without seeking individual exemptive orders, and Rule 485, which allows ETF sponsors to register new funds through post-effective amendments with defined automatic effectiveness periods. CCI argued that similar efficiencies could benefit non-ETF ETPs without sacrificing investor protections.
The group also recommended that the SEC coordinate with the Treasury and IRS to address tax asymmetries between ETF and non-ETF structures. CCI said certain non-ETF ETPs can face less favorable tax treatment, creating an uneven playing field and potentially influencing how innovative products are structured.
