SEC Plans Major ETF Approval Overhaul After Crypto Filing Boom

Highlights:

• The SEC ETF Approval review could make future fund applications more consistent and predictable.
• The SEC now receives about 200 ETF applications every month as demand for new investment products continues to grow.
• Confidential ETF filings could help issuers develop new products before competitors see their ideas.

The U.S. Securities and Exchange Commission is reviewing its exchange-traded fund approval process after Brian Daly said the agency now receives about 200 ETF applications every month during a Trillions interview with Bloomberg ETF analyst Eric Balchunas and Joel Weber. Daly, who directs the SEC’s Division of Investment Management, said the agency wants a more orderly process for reviewing new ETF products.

SEC Official Says Agency Is Building a More Orderly ETF Approval Process, Considering Confidential Filings

Bloomberg ETF analyst Eric Balchunas cited SEC Investment Management Division official Brian Daly as saying that the SEC receives about 200 ETF applications per month,… pic.twitter.com/tEeeaHzJ9K

— Wu Blockchain (@WuBlockchain) July 3, 2026

He also admitted the SEC “did a bad job with crypto” and said the agency wants to rebuild trust through a more consistent approval process. Daly said the SEC is facing more applications because issuers are launching funds tied to cryptocurrencies, prediction markets, leverage, and other alternative investment strategies.

Brian Daly said the SEC’s review covers novel investment products, including prediction market ETFs, because the agency wants consistent standards for evaluating new fund structures. He said the SEC wants issuers to understand the standards regulators use when reviewing ETF applications so approval decisions become more predictable.

The agency also wants to apply the same approval standards across crypto ETFs, prediction market ETFs, and other innovative funds. SEC officials believe consistent standards could reduce uncertainty for issuers while maintaining investor protections.

The SEC expanded the review after fund managers submitted more ETF proposals beyond traditional stock and bond funds. Daly also said ETF assets under management increased from about $4 trillion in 2019 to more than $12 trillion by the end of last year.

How the SEC Is Reshaping ETF Innovation and Approval

The SEC’s experience with crypto ETFs has shaped the current review. The agency delayed or rejected crypto ETF proposals for years before approving spot Bitcoin ETFs. Brian Daly said the agency now wants a more orderly review process because inconsistent crypto ETF decisions weakened industry confidence.

'We did a bad job with crypto, broke trust, but we looking to get back to a good place and make an orderly process' to deal w the 200(!) ETF filings they get every month, incl 'novel' stuff like prediction mkts – SEC's Brian Daly in EXCLUSIVE Trillions intv feat @ElleBeyoud pic.twitter.com/nYRjs77aTA

— Eric Balchunas (@EricBalchunas) July 2, 2026

The SEC included prediction market ETFs in the review because issuers submitted funds tied to elections and other event-based contracts. The agency recently delayed proposals from Bitwise, Roundhill Investments, and GraniteShares while requesting public comments. The SEC wants public feedback before deciding whether existing ETF rules adequately regulate event-based investment funds.

SEC Chair Paul Atkins said ETF innovation requires a consistent, transparent, and efficient regulatory framework. He said consistent rules can encourage innovation without reducing investor protections. The SEC also wants an asset-neutral approval process that applies the same review standards to crypto ETFs, commodity ETFs, equity funds, and other investment products.

Review Could Open the Door to More ETF Products

The SEC is also considering confidential ETF filings during part of the approval process. The proposal would allow ETF issuers to file applications privately before public disclosure so competitors cannot copy product ideas during development. The SEC previously asked whether ETF applications should remain confidential during part of the 75-day review period while reviewing novel ETF proposals.

THE SEC IS RETHINKING HOW IT REGULATES THE ENTIRE $16 TRILLION ETF INDUSTRY, AND IT STARTED WITH AN ADMISSION MOST INVESTORS WOULD FIND STRANGE

The SEC does not actually approve or reject ETFs.

Under the current rules, once a fund is effective, the agency has essentially one… pic.twitter.com/uBJKUGQpSE

— WOLF (@WOLF_Financial) June 30, 2026

The SEC’s review also comes as fund managers expand crypto ETF offerings beyond single-asset Bitcoin and Ethereum products. The agency recently approved the T. Rowe Price Active Crypto ETF, which may invest in Bitcoin, Ethereum, XRP, Solana, Dogecoin, Shiba Inu, and other digital assets. Bitwise also filed an S-1 registration statement for a spot SUI ETF.

In addition, the SEC introduced generic listing standards that shortened parts of the approval process for qualifying ETFs. The agency is also reviewing tokenized securities under a separate digital asset initiative while updating its ETF approval framework.