Franklin Templeton Debuts Ethereum ETF on DTCC, SEC Approval Pending


Franklin Templeton, an American multinational holding company, has unveiled its Ethereum exchange-traded fund (ETF), known as the “Franklin Ethereum TR Ethereum ETF” with the code EZET. The Depository Trust and Clearing Corporation (DTCC), a prominent platform for securities transactions in the United States enumerated EZET on its website’s updated list.

Does the Listing Mean Approval?

Although the listing is significant, it does not guarantee automatic confirmatory approval from the United States Securities and Exchange Commission (SEC). It is customary for the DTCC website to list securities eligible for trading and settlement within its systems, which can include ETFs that have completed certain registration or compliance processes.

The final approval status for an ETF filing solely rests on the SEC as the final authority. In any case, the Franklin Ethereum spot ETF’s presence on the DTCC website indicates its availability for creation and redemption, an essential feature for ETFs that enables adjusting the supply of ETF shares to meet demand.

Franklin Templeton, with around $1.5 trillion in assets under management (AUM), filed for the Spot Ethereum ETF in February, about a month after the approval of the Spot Bitcoin ETF. It remains on the waiting list of the SEC for approval.

SEC Approval and Timeline Extension

Based on the S-1 filing to the SEC, Franklin Templeton, if approved, the ETF would be listed on the Chicago Board Options Exchange (Cboe).

The SEC, however, postponed its potential decision on Franklin Templeton’s Ethereum spot ETF application. The postponement on April 23 is to allow the SEC to review the proposed rule change for listing and trading Franklin Ethereum Trust shares on the Cboe BZX Exchange.

 With this extended review period, the SEC has until June 11 for a decision, providing an additional 45 days to evaluate the application. Hong Kong’s regulatory body in contrast did not foot drag as it gave green light to Spot Bitcoin ETF and Ethereum ETF recently.

Franklin Templeton Joins Industry Giants

The launch of Franklin Templeton’s Ethereum spot ETF aligns the asset management firm with other industry leaders such as BlackRock, Grayscale, VanEck, and ARK Invest. These industry giants have also entered the race to offer Ethereum-based funds.

While the market for Ethereum-based ETFs is increasing, the approval process for Ethereum ETFs is complex and differs from that of Bitcoin ETFs.

Bloomberg ETF analyst Eric Balchunas estimates the likelihood of the SEC approving a spot Ether ETF at around 35% in May. He hinges it on the SEC’s more conservative stance compared to its approach to Bitcoin ETFs. Another analyst, Walter Bloomberg aligns with Balchunas as he anticipates SEC is likely to deny approval.

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