Eleanor’s revelation exposes the power of 17 C.F.R. Section 201.431, allowing any SEC Commissioner to review staff-approved matters.
Fox Reporter Eleanor Terrett has recently highlighted a significant procedural aspect of the U.S. Securities and Exchange Commission (SEC) that could influence the fate of the much-anticipated spot Bitcoin Exchange-Traded Fund (ETF) approval.
According to Terrett’s January 9th tweet, even though there is no scheduled commission vote on the Bitcoin ETF, each of the five SEC commissioners retains the right to request a review and a full commission vote.
SEC’s Procedural Clause
This procedural nuance could potentially delay the approval of a spot Bitcoin ETF, a development eagerly awaited by the crypto community.
The current SEC commissioners are Gensler, Crenshaw, Peirce, Lizárraga, and Uyeda.
Eleanor’s revelation was in response to a tweet by Anne Kelley, which shed light on a little-known clause, 17 C.F.R. Section 201.431.
It empowers any single SEC Commissioner to require the full Commission to review a matter previously approved via staff-delegated authority. It is one of the few tools available to non-chair commissioners to enhance transparency in the SEC’s decision-making process.
Adding to the discourse, Eric Balchunas, a senior Bloomberg ETF analyst, commented on Eleanor’s tweet, expressing confidence in the approval process under SEC Chair Gensler’s direction.
Balchunas suggested that the staff’s diligent work with issuers indicated a plan for approval and advised against over-complicating the situation.
The string of tweets followed a statement by Justin Slaughter, policy director at Paradigm, highlighting the SEC’s ability to vote on matters without a formal meeting through the “seriatim” process.
In a subsequent tweet, Anne Kelly emphasized the potential for this clause to add time to the approval process, raising the question of whether a commissioner might request a full commission vote.
SEC Reportedly Overwhelmed with Paperwork
On January 2, Terrett had expressed skepticism about an imminent spot Bitcoin ETF approval, citing vacations and work overload at the SEC. Her comments responded to crypto expert Scott Melker’s speculation about a potential approval.
Comparing the situation to the Ethereum futures approval in October 2023, she outlined a similar timeline for the spot Bitcoin ETF, suggesting that the process might extend beyond the immediate deadline.
Furthermore, Terrett mentioned in another tweet that the SEC and major exchanges such as Nasdaq, CBOE, and NYSE were meeting regarding the spot Bitcoin ETF applications.
These meetings allow issuers to address application shortcomings, moving them closer to approval. However, with the January 10 deadline approaching, the outcome of these meetings and the SEC’s final decision remain uncertain.