The U.S. Securities and Exchange Commission (SEC) is asking for public feedback on a new type of ‘Novel ETFs’ and how funds investing in new assets and strategies should be regulated. This comes as the SEC keeps delaying decisions on prediction market ETFs because of concerns about current rules. The SEC says it wants to support innovation while protecting investors and keeping markets fair and efficient.
In its latest request, the SEC asked if ETFs that invest in assets not considered securities should still be covered by the Investment Company Act or if a new approach is needed.
The SEC also questioned whether these funds should be allowed to use existing generic listing standards that normally permit ETF registrations to become effective after 75 days.
This consultation is happening as asset managers like Roundhill, Bitwise and GraniteShares try to get approval for ETFs tied to prediction markets like Polymarket. Regulators have not approved these products yet because there are still questions about their legal and regulatory status.
The SEC also raised concerns about growing competition among ETF issuers. It wants feedback on whether companies are rushing to launch new products just to be first, which could lead to incomplete or lower-quality applications.
To address this, the SEC has suggested changes like setting minimum registration fees and letting ETF applications stay confidential for part of the review before they become public.
The SEC is also working with the Commodity Futures Trading Commission (CFTC) to review broader rules for tokenized securities and crypto perpetual products.
This consultation shows the SEC is being careful but more active about new financial products tied to digital assets. While supporting innovation, the SEC wants to make sure new investment options follow rules that protect investors and keep markets fair.
LATEST: ⚡️ The SEC is seeking public comment on a new regulatory framework for “novel ETFs,” including crypto funds and prediction market ETFs tied to political and economic outcomes. pic.twitter.com/1x1s53lsGO
— CoinMarketCap (@CoinMarketCap) July 1, 2026
Press Release: sec.gov
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