The U.S. Securities and Exchange Commission (SEC) has demanded two exchange-traded funds (ETFs) to remove the term”Blockchain” in their tickers. The data had been released by Bloomberg a couple of days back.
ETFs have to Remove the “Blockchain” Word Out Of Their Tickers
Exchange traded funds became remarkably popular with investors who wanted to get access into this blockchain world. These investment tools let curious users have exposure to the blockchain ecosystem.
The U.S. Securities and Exchange Commission is attempting to keep under control the investment resources offered on the market to investors. According to Bloomberg, over 10 percent of those new ETFs published in 2018 were associated to a certain theme.
On the Topic, J. Garret Stevens, Chief Executive Officer of Exchange Traded Concepts, commented:
“We get questions more than we used to where we have to be able to defend our name. Now almost all names, they’ll come back and say ‘Can you justify, give us your explanation on why this name is OK?’”
Sometimes, ETFs opt to create catchy titles to receive a larger focus from investors. Nonetheless, it would appear that the U.S. SEC has been quite strict about how firms manage these difficulties. In accordance with the Investment Company Act of 1940, issuers can't utilize “materially deceptive or misleading” names.
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SEC Commissioner Hester Peirce clarified that names must match up to what the fund will. The regulatory agency must restrain it and it may issue a stop order to stop capital from providing the shares to investors when there are a few issues with it.
Two funds have been invited to take out the term”blockchain” in their titles. Citing people knowledgeable about the issue, Bloomberg noted that the Amplify and Truth Shares ETFs referenced dispersed ledger technologies (DLT) if they registered their initial records to be accepted. Nonetheless, they needed to alter those titles for the SEC to approve these afterwards.
It's worth noting that there have been several firms on the market which chose to incorporate the term “blockchain” in their titles so as to obtain the eye of the marketplace. One of those companies was Long Island Iced Tea which altered its title into Long Blockchain Corp. Following it, its inventory registered a cost growth of 200 percent. Nevertheless, the business was already fined.
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