Industry Experts Advocate for the Reinstatement of ‘First-to-File’ Principle by the SEC
Leading asset management firms VanEck, 21Shares, and Canary Capital have collectively reached out to the United States Securities and Exchange Commission (SEC). Their request centers on re-establishing the ‘first-to-file’ principle—a regulatory method prioritizing the review and approval of exchange-traded product (ETP) applications based on their submission order. These influential firms argue that the SEC’s recent deviation from this principle hampers innovation and disrupts market equity.
SEC’s Regulatory Shift: Allegations of Favoritism from ETF Providers
In a detailed communication to SEC Chairman Paul Atkins dated June 5, CEOs from VanEck, 21Shares, and Canary Capital—namely Jan van Eck, Duncan Moir, and Steven McClurg—expressed strong dissatisfaction. The communication criticized the SEC’s move away from the ‘first-to-file’ principle in favor of a simultaneous approval method for recent ETP applications. This principle, according to the CEOs, has historically ensured fairness, supported innovation, and provided a first-mover advantage. It facilitated a competitive market environment where smaller asset managers could capture substantial market shares, bolstering their overall market presence.
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The letter further elaborates:
“If multiple sponsors pursued similar ideas concurrently, priority was given to those who filed first. This approach has allowed the ETP sector to expand to $15.4 trillion in investor assets. Emerging companies like Wisdomtree have ascended to industry leadership, challenging established mutual fund companies’ dominance in the ETP market.”
Conversely, the shift to simultaneous approvals, as evident in the approval processes for Bitcoin and Ethereum spot ETFs in 2024, is criticized by the executives at VanEck, 21Shares, and Canary Capital. They assert that this practice undermines the necessity for innovation within the ETP industry, potentially favoring larger asset managers who can replicate smaller firms’ products, assured of receiving the same launch date. While acknowledging possible justifications such as alleviating the workload on SEC staff, Van Eck, Moir, and McClurg argue that reverting to the ‘first-to-file’ principle is crucial for maintaining the regulatory integrity of the U.S. ETP market. They advocate for a prompt reinstatement of this standard to foster financial innovation, creativity, and market competition.
Current State of the Cryptocurrency Market
As of the latest data, the total cryptocurrency market capitalization stands at an impressive $3.22 trillion, marking a 2.41% increase over the past 24 hours. Meanwhile, the total trading volume has reached $109.06 billion, reflecting vibrant market activity.
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