XRP News Today: ETF Issuers Urge SEC to Reinstate First-to-File Principle for Approvals

ETF issuers VanEck, 21Shares, and Canary Capital have collectively penned a letter to the US Securities and Exchange Commission (SEC), advocating for a return to the "first-to-file" principle in the approval process for ETF applications. This principle, which was the default process until the debut of crypto ETFs, ensures that applications are approved in the order they are submitted to the regulator.

The companies contend that the SEC's deviation from this principle has detrimental effects on the market. By not adhering to the first-to-file rule, the SEC is allegedly diminishing healthy competition and impeding financial innovation. The letter emphasizes that this lack of adherence reduces the incentive for pioneering product development, which in turn limits investor choices, compromises market efficiency, and undermines the SEC's mission of protecting investors and maintaining fair, orderly, and efficient markets.

The letter further argues that the continued global leadership of the United States in financial innovation is intrinsically linked to regulatory frameworks that support and reward entrepreneurship, creativity, and genuine innovation. The issuers believe that a return to the first-to-file principle would foster a more competitive and innovative environment, ultimately benefiting investors and the market as a whole.

Digital asset ETF filings saw a surge following the inauguration of US President Donald Trump, as asset managers and crypto companies rushed to gain approval for new investment vehicles. This was driven by anticipation of a more favorable regulatory climate in the US. However, despite the growing institutional interest in altcoin and staking ETFs, the SEC has delayed decisions on several applications, including those for altcoin and crypto-staking ETFs.

In May, the SEC postponed its decision deadline on listing Grayscale’s spot Solana (SOL) Trust ETF to October. Additionally, the regulator delayed the approval of staking and XRP (XRP) ETFs, a move that did not surprise analysts. The SEC's approach to these filings involves taking the full time to respond to a 19b-4 filing, with almost all of these filings having final due dates in October. Early decisions are considered out of the norm.

Furthermore, the SEC recently responded to the effective registration statements for the REX-Osprey staked ETFs, raising concerns that these investment vehicles may not qualify as ETFs due to the business structure of the underlying fund. This has caused delays in the ETF launch, despite many analysts forecasting that the effective registration statements signaled imminent launches of these investment products.