A report from The Wall Street Journal last week revealed that individuals with knowledge of the matter stated that the Securities and Exchange Commission (SEC) expressed dissatisfaction with the number of applications filed for direct Bitcoin funds in recent weeks.
Leading U.S. options market, Cboe, announced to the media that it intends to modify its requests. Consequently, Cboe updated its requests for direct Bitcoin funds for WisdomTree, VanEck, Invesco, and Fidelity.
At that time, it was not yet disclosed whether BlackRock had updated its registration for the direct Bitcoin fund. However, on June 29, 2023, records indicate that Nasdaq modified BlackRock’s registration for the direct Bitcoin fund under the 19b-4 rule. CoinBase has been appointed as the Surveillance Sharing Agreement (SSA) partner for the fund, similar to other ETF reapplications.
Essentially, an SSA partner is the entity that has agreed to share surveillance information with another party. Regarding the ETF, the SSA collaborates with the management to exchange surveillance information with the aim of enhancing security and ensuring public safety.
One of the primary concerns about the direct Bitcoin fund, as repeatedly highlighted by the SEC over the years, is market manipulation and inadequate investor protection.
However, BlackRock, being the largest asset manager in the world, holds significant credibility, leading some to speculate that strong endorsements from this financial powerhouse could contribute to the approval of BlackRock’s direct Bitcoin fund.
“The dual surveillance agreement for direct Bitcoin is expected to be between Nasdaq and CoinBase and aims to enhance the exchange’s market surveillance program,” according to details mentioned in BlackRock’s registration.
In the ETF application submitted for approval by the U.S. Securities and Exchange Commission, CoinBase has also been appointed as the custodian for BlackRock. BlackRock’s registration states that there is a detailed description agreement between CoinBase and Nasdaq, which commenced on June 16, 2023.
Some market observers suggest that this may give BlackRock an advantage over data that only indicates funds are “expected to enter into the surveillance agreement,” as stated by Nate Geraci, co-founder of the ETF Institute.