The United States Securities and Exchange Commission (SEC) has ordered two companies which applied for ETF registration to remove the word “blockchain” and any other mention of the technology from their titles. According to the representatives of the regulator, this will help to avoid the ambiguity which might appear between the investors because of the title’s inconsistency with the emitter’s activity, reports Bloomberg.
While more than a third of the ETFs have already made changes to their titles in the application process, two funds, Amplify and Reality Shares, still contain links to the blockchain: BLOK and BLCN, respectively. In turn, the Commission refused to approve them, at least until the mention of the technology of the distributed registries is excluded.
The number of applications submitted to the SEC from Exchange Traded Funds (ETF) is constantly growing. During the interview with Bloomberg, J. Garrett Stevens, CEO of Exchange Traded Concepts, said that the number of complaints received by the company regarding the legitimacy of the SEC claims on name changes is more than ever before. But this rule is not fictional and is contained in the Investment Company Act of 1940, which prohibits asset emitters from using “misleading” names.
Earlier, the SEC announced that cryptocurrency regulation in 2019 is a priority and is working to protect investors. Therefore, it is not surprising that the regulator is trying to protect investors by maintaining transparency, fairness, and efficiency of market relations while promoting the formation of capital.
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