Fidelity amends its S-1 application for a spot Ether ETF

Fidelity has amended its S-1 application with the U.S. Securities and Exchange Commission (SEC) for its spot Ether exchange-traded fund (ETF). The updated application clarifies that the ETF’s underlying Ether tokens will not be staked.

S-1 filings are mandatory registration forms required by the SEC for launching publicly traded securities in the United States.

This filing follows reports suggesting that the SEC has changed its stance on spot Ether ETFs, possibly due to political pressure. Consequently, the commission has asked ETF issuers to revise their 19b-4 filings. The SEC's decision deadline for VanEck’s Ether ETF proposal is May 23. Senior Bloomberg ETF analyst Eric Balchunas has raised the likelihood of approval to 75%, up from 25%, for the 19b-4 form.

However, approval for Ether ETFs also requires the acceptance of their S-1 filings. Bloomberg ETF analyst James Seyffart noted that the approval process for S-1 filings could take weeks to months, even if the 19b-4 filings are approved this week. Seyffart believes that S-1 approval is a matter of "when" rather than "if." The SEC faces final deadlines for decisions on VanEck and ARK’s spot Ethereum ETF applications on May 23 and May 24, respectively.

In a recent report that liquidity concerns in ETH’s spot and futures markets and its previous classification as a security by the SEC contribute to doubts about swift approval. If rejected, issuers might need to resubmit filings, potentially delaying approval until late 2024 or early 2025.

Another possible scenario involves the approval of the 19b-4 filings while delaying the S-1s. Both forms must be approved for the launch of spot ETH ETFs. The 19b-4 filing allows exchanges like the New York Stock Exchange (NYSE) or Nasdaq to list new products, including spot ETH ETFs, while the S-1 is the initial registration form for new securities offered to the public.

Notably, fund companies have engaged in active dialogue with the SEC, submitting multiple amended versions of paperwork to address concerns before the approval of Bitcoin ETFs. However, there has been significantly less activity regarding spot Ethereum ETF filings, leading many to anticipate a disapproval order.