SEC Seeks Public Comment on Novel ETFs and Investment Strategies

The US Securities and Exchange Commission (SEC) has requested public comment on exchange-traded funds (ETFs) investing in novel asset classes or using new investment strategies, as the agency reviews how such products should be regulated.

The consultation seeks feedback on whether existing rules adequately address novel ETFs, how such funds should be regulated and whether changes to the registration process are needed as new products enter the market.

According to the regulatory agency, the request focuses on funds investing in innovative asset classes or employing new investment strategies, where it is evaluating whether existing regulations remain appropriate.

The public comment period will remain open for 60 days following publication in the Federal Register, giving market participants an opportunity to weigh in before the SEC considers potential regulatory changes.

Exchange-traded funds have grown rapidly in recent years, with assets under management increasing from about $4 trillion in 2019 to more than $12 trillion at the end of 2025, according to the SEC.

Related: Spot Bitcoin ETFs bleed $1.7B as outflow streak hits four weeks

The request follows another recent consultation by US market regulators. Last week, the SEC and Commodity Futures Trading Commission (CFTC) sought public feedback on harmonizing portfolio margin rules across securities and derivatives markets.

Crypto ETF strategies grow more sophisticated

In recent months, crypto ETF issuers have increasingly expanded beyond simple price-tracking products, introducing funds tied to staking, stablecoin reserves and more specialized investment strategies.

In June, ProShares introduced the GENIUS Money Market ETF, a Treasury-focused fund designed around reserve assets permitted under the GENIUS Act for payment stablecoins, while Grayscale launched the Hyperliquid Staking ETP, offering exposure to HYPE (HYPE) while seeking to generate staking rewards.

Bitcoin investment products are becoming more specialized as well. BlackRock proposed an options-based Bitcoin income ETF in January, followed by Goldman Sachs in April with a fund combining spot Bitcoin products and covered-call strategies.

BlackRock’s Bitcoin Premium Income ETF filing. Source: SEC.gov

Earlier this month, Franklin Templeton proposed two ETFs that would systematically reinvest stock dividends into Bitcoin-linked investments, combining US equities with a rules-based Bitcoin allocation. The proposed funds would gain Bitcoin (BTC) exposure through instruments including exchange-traded products, futures, options and Bitcoin-backed depositary receipts.

ETF issuers are also experimenting with portfolios that combine digital assets with traditional asset classes. In January, Bitwise launched an actively managed ETF pairing Bitcoin with gold, precious metals and mining equities.