Rule 6c-11 refers to a specific regulation under the Investment Company Act of 1940 in the United States, providing an exemptive order for exchange-traded funds (ETFs) to operate without certain traditional investment company restrictions. While not directly crypto-specific, its implications extend to the digital asset space by establishing a framework that could facilitate the creation and listing of spot crypto ETFs. This rule aims to modernize ETF regulation.
Mechanism
The rule streamlines the approval process for ETFs by allowing them to meet general conditions rather than requiring individual exemptive orders. For crypto, this means a potential path for a spot Bitcoin ETF, for example, would involve meeting these specified conditions, including requirements for liquidity, pricing, and custody. It creates a regulatory pathway for new product structures.
Methodology
Understanding Rule 6c-11 involves analyzing its requirements concerning ETF operations, transparency, and investor protection. Digital asset product developers and issuers reference this rule as a guide for structuring compliant crypto ETPs, particularly in their efforts to obtain regulatory approval. The strategic objective is to leverage existing regulatory frameworks to bring digital asset investment products to a broader, regulated market.
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