Franklin Templeton Ethereum ETF gets listed on DTCC

Franklin Templeton, a U.S.-based global leader in asset management, has listed its Ethereum exchange-traded fund (ETF) on the Depository Trust and Clearing Corporation (DTCC) platform, raising hopes of spot Ether ETFs approval by the U.S. SEC.

The DTCC is an American post-trade financial services company that majors in clearing and settlement services for the financial markets.  According to information updated on the notable platform for securities transactions in the U.S. on April 26, the Franklin Templeton Ethereum ETF is named “Franklin Ethereum TR Ethereum ETF.” 

Represented by the ticker code EZET, the ETF has been added to the DTCC “Create/Redeem” column. This indicates that the EZET has become available for creation and redemption, further demonstrating that Franklin Templeton’s Ethereum ETF is qualified for trading and settlement within the DTCC’s systems. 

But here’s the catch. Although the development suggests that the ETF has completed certain registration or compliance processes in the U.S., the Franklin Templeton Ethereum ETF has not been approved by the U.S. Securities and Exchange Commission (SEC) at press time.  

Franklin Templeton Ethereum ETF pursuit

EZET’s listing on DTCC comes about three months after Franklin Templeton filed a Form S-1 registration statement with the SEC under the Securities Act of 1993 to launch a spot Ether (ETH) ETF. 

Filed on February 12, 2024, the development marked the firm’s commitment to bridging traditional finance with digital assets such as ETH. While the primary aim of the filing is to provide investors with a convenient alternative to directly buying, holding and trading the second-largest crypto by market cap, Franklin Templeton’s registration statement communicated interest in staking the ETH held by the proposed fund. 

Dubbed “Franklin Ethereum ETF”, the proposed spot Ether ETF would be traded on the Chicago Board Options Exchange if approved by the SEC, with Coinbase Custody Trust Company, LLC as the custodian for the ETF’s ether holdings and the Bank of New York Mellon is the custodian for the ETF’s cash holdings. 

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Will the SEC finally approve spot Ether ETFs in the U.S.?

Despite approving spot bitcoin ETFs in January 2024, the U.S. SEC has remained muted on spot Ether ETFs. At the time of writing, the regulatory agency is yet to approve several requests for leading asset managers to onboard this ETH investment vehicle.  

While May 2024 was initially scheduled for the SEC’s response on spot ETH ETF applications, the agency announced a delay in its decision in a recent update, a few weeks after issuing Uniswap Labs a Wells notice

The Commission has considered it necessary to extend the review period by an additional 45 days to June 11. In other words, the SEC will decide on the Franklin Templeton Ethereum ETF on June 11, 2024, despite getting listed on the DTCC platform last week. 

Among the leading asset managers contending for the SEC’s approval to launch spot ETH ETFs are BlackRock, ARK Invest and Van Eck. Notably, Grayscale filed requests on April 23 to launch two spot Ether ETFs, with the SEC expected to give its decision in late 2024 Q2. 

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Whether or not the agency will approve these requests is a matter of time. Bloomberg ETF analyst Eric Balchunas said the odds of a spot Ether ETF being approved in May 2024 is at about 35%. 

The SEC’s less assertive attitude toward Ether ETFs compared to bitcoin ETFs is because the agency has not explicitly classified ETH as non-security. Regardless, Valkyrie co-founder Steven McClurg believes ETFs for altcoins — such as ETH and XRP — are inevitable. 

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