SEC Opens Public Comment on 'Novel' ETFs, Putting Crypto and Prediction-Market Funds in Scope
The agency is asking how far novel funds can go as ETF assets have grown 17% since the end of 2025, ETFGI said.
- On Tuesday, the SEC initiated a 60-day public comment period regarding the regulation of 'novel' ETFs, a fast-growing category encompassing products linked to cryptocurrency, leverage, and prediction market contracts.
- Explosive industry growth drove the request, as ETF assets surged from $4 trillion in 2019 to $12 trillion in 2025; Morningstar data indicates about 98 per cent of recent filings now qualify as novel.
- Market participants have raised questions regarding whether novel ETFs with a principal investment strategy to invest in assets that are not securities under the Investment Company Act are investment companies.
- Cowen policy analyst Jaret Seiberg noted the request builds a record to justify future policy changes that would permit ETFs focused on event contracts, crypto assets, and single-stock strategies.
- SEC Chairman Paul Atkins stated that public comment would help the agency determine how ETFs can grow while serving investors effectively, as the commission works to embrace technologies like cryptocurrency and securities tokenization.
23 Articles
23 Articles
SEC Requests Public Comment on Some of Wall Street’s Wildest ETFs
Just because it can go in an ETF doesn’t mean it should. The Securities and Exchange Commission is opening a public comment period to discuss “innovative” or “novel” exchange-traded funds after a whirlwind of product development in recent years, both here and abroad. In a statement Tuesday, the agency said the 60-day comment window will help foster innovation, but also protect investors and the markets, and the comments could eventually factor i…
SEC Opens Public Comment on 'Novel' ETFs, Putting Crypto and Prediction-Market Funds in Scope
The U.S. Securities and Exchange Commission opened a public comment period on ‘novel’ exchange-traded funds, asking how products built on crypto and other nontraditional assets should be regulated and signaling a possible overhaul of how such funds reach US markets. The agency issued the request for comment on Tuesday, putting three questions to the public: whether some of these funds even count as investment companies, how they ought to be regu…
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