A senior U.S. Securities and Exchange Commission official said the agency is working toward a more orderly and asset-neutral process for approving exchange-traded funds, including possible confidential filings that could help issuers protect product ideas before launch.
Brian Daly, director of the SEC’s Division of Investment Management, said the regulator is assessing how to manage a rapidly expanding ETF pipeline while preserving investor protection, market fairness and innovation. His remarks come as the SEC faces roughly 200 ETF applications a month and a wave of increasingly complex products tied to crypto assets, leverage, options strategies and prediction-market-style exposures.
The comments follow the SEC’s June 30 request for public comment on “novel” ETFs, which asked market participants whether the existing framework remains appropriate for funds that invest in innovative asset classes or use unusual investment strategies. SEC Chairman Paul Atkins said innovation in ETFs depends on a consistent, transparent and efficient regulatory framework. Daly said public engagement is essential as the ETF market continues expanding beyond traditional equity and bond products.
The agency is also considering whether aspects of the ETF filing process should receive confidential treatment. That idea is intended to address a recurring industry concern: ETF issuers may be reluctant to develop new products if competitors can copy ideas immediately after public filings appear. Confidential submissions could give firms more room to work with regulators before revealing strategies to the market.
Crypto ETF Experience Shapes Reform
The push for a cleaner approval process is partly shaped by the SEC’s difficult history with crypto ETFs. Spot Bitcoin ETFs were rejected or delayed for years before eventual approval, and the process was complicated by litigation, market pressure and a hacked SEC social media account that falsely announced approval before the official decision.
Daly reportedly acknowledged that the agency’s handling of some crypto ETF announcements had damaged industry trust. A more predictable process could reduce confusion by making timing, standards and communication clearer for issuers and investors.
The issue has become more urgent because crypto ETF filings have expanded far beyond Bitcoin and Ether. Issuers have sought products tied to Solana, XRP, Dogecoin, multi-asset baskets, staking strategies and leveraged crypto exposures. Some products raise familiar questions around custody, liquidity and market manipulation, while others blur the line between investment vehicles and speculative trading products.
A more asset-neutral process would not necessarily mean automatic approval for crypto ETFs. Instead, it would require the SEC to apply clearer standards across products, regardless of whether the underlying asset is a commodity, token, equity strategy or event-linked exposure.
Confidential Filings Could Change Competition
Confidential filings could reshape ETF competition if adopted. In the current system, public registration statements can reveal product mechanics, index designs, fee strategies and market positioning before approval. That transparency helps investors and competitors monitor the market, but it can also reduce first-mover incentives.
For issuers, confidentiality could encourage more innovation by allowing them to refine complex products with SEC staff before rivals see the full design. For investors, however, too much confidentiality could reduce early public scrutiny of risky or poorly structured products. The challenge for the SEC is to protect innovation without weakening disclosure, comment rights or market transparency.
The market impact could be significant. The U.S. ETF market has grown from about $4 trillion in 2019 to more than $12 trillion at the end of 2025, according to the SEC, while Reuters reported that the broader ETF market has approached roughly $15.7 trillion as increasingly complex products gain traction. As ETFs become the default wrapper for retail and institutional exposure, the approval process itself becomes market infrastructure.
For crypto, a more orderly ETF framework could improve confidence by reducing surprise delays and inconsistent treatment. It could also accelerate competition among issuers if standards become clearer. The next phase will depend on how the SEC balances speed, confidentiality and investor protection. Daly’s remarks suggest the agency recognizes that ETF innovation has outgrown the old playbook, but it is not yet ready to abandon caution around products that can quickly transmit risk to retail investors.
