On May 11, the Securities Exchange Commission’s strongly encouraging any investor interested in investing in mutual funds exposed to the Bitcoin futures market to carefully consider the risks involved with such investments.
The Statement also summarized IM staff’s prior guidance from its Engaging on Fund Innovation and Cryptocurrency Related Holdings Letter from January 2018 , and potential manipulation and other potential risks of cryptocurrency-related markets.
IM staff expect this monitoring will include, among other things, analyzing the liquidity and depth of the Bitcoin futures market, analyzing mutual funds’ ability to liquidate Bitcoin futures positions to meet daily redemption demands, monitoring funds’ valuations of holdings in the Bitcoin futures market, considering mutual funds’ liquidity classification of any position in the Bitcoin futures market including the basis for those classifications, assessing the ongoing impact of the potential for fraud or manipulation in the underlying Bitcoin markets, and considering whether the Bitcoin futures market could accommodate ETFs.
IM staff concluded by emphasizing that only mutual funds with appropriate strategies supporting this type of investment and full disclosure of material risks should invest in the Bitcoin futures market at this time.
She counsels broker-dealers, hedge funds, investment banks and financial services clients on enforcement issues involving the Securities and Exchange Commission and state and federal regulatory authorities.
No attorney-client or confidential relationship is formed by the transmission of information between you and the National Law Review website or any of the law firms, attorneys or other professionals or organizations who include content on the National Law Review website.
The NLR does not wish, nor does it intend, to solicit the business of anyone or to refer anyone to an attorney or other professional.
Unless otherwise noted, attorneys are not certified by the Texas Board of Legal Specialization, nor can NLR attest to the accuracy of any notation of Legal Specialization or other Professional Credentials.