Global asset management giant Fidelity engaged in a meeting with the SEC on December 7, outlining details of its proposed spot bitcoin exchange-traded fund (ETF). The SEC’s website reveals that Fidelity submitted a comprehensive presentation titled “Bitcoin ETF Workflows,” emphasizing “In-Kind” creation and redemption models through detailed slides.
The presentation underscored the efficiency of arbitrage and hedging with physical creations, particularly through self-clearing ETF market maker firms. Fidelity emphasized the role of physical creation and redemption in enhancing trading efficiency and secondary market pricing for all participants involved in the Bitcoin ETF.
As the market anticipates potential SEC decisions on proposed spot ETFs, Fidelity’s presentation delves into the technical aspects of workflows, shedding light on the critical role of in-kind and cash in the creation and redemption process. Amid multiple amendments to filings and regulatory discussions, the focus appears to be on ensuring the operational aspects of the proposed funds.
In response to this trend, Fidelity filed an amended S-1 form for its proposed spot fund on Friday, further signaling the industry’s commitment to offering transparent and effective solutions. The filing reflects broader industry efforts, as witnessed in a Nov. 28 meeting between BlackRock and the SEC. BlackRock submitted a presentation detailing a “Revised In-Kind Model Design,” addressing the SEC’s questions regarding balance sheet impacts and risks related to market makers during the redemption flow.
The ongoing collaboration between major financial institutions and regulatory bodies underscores the industry’s commitment to navigating regulatory nuances and advancing towards the potential approval of spot bitcoin ETFs.
