SEC Eyes Solana Crypto ETF Trading on BZX Exchange Soon
Published Date: 3/19/2025
Notice
Summary
Cboe BZX Exchange wants to start trading shares of the Franklin Solana ETF, a new fund tied to the Solana cryptocurrency, under their commodity-based trust rules. This move opens up fresh investment options for traders and investors interested in crypto assets. The proposal was filed on March 12, 2025, and is now open for public comments before it goes live.
Analyzed Economic Effects
6 provisions identified: 3 benefits, 1 costs, 2 mixed.
New Solana ETF filing and timeline
Cboe BZX filed a proposed rule change on March 12, 2025 to list and trade the Franklin Solana ETF (a fund that holds spot SOL). The Trust filed a registration statement on Form S-1 on February 21, 2025 (File No. 333-285121); the Shares will not trade until that registration statement is effective and the proposal is approved.
Daily NAV and frequent price data
The Fund will hold only SOL, cash, and cash equivalents and will calculate Net Asset Value (NAV) daily as of 4:00 p.m. ET based on the CME CF Solana-Dollar Reference Rate (NY Variant). An Intraday Indicative Value (IIV) will be published every 15 seconds during Regular Trading Hours to reflect intra-day changes.
Creation/redemption in 50,000-share baskets
Creations and redemptions will occur in Creation Baskets of 50,000 Shares. Creations/redemptions may be in-kind (SOL) or in cash, and authorized participants will deliver SOL or cash to the Fund's custodians in exchange for baskets. Retail trades during the day may occur at a premium or discount to NAV.
Coinbase custody and cold storage security
Coinbase Custody Trust Company will serve as the Solana Custodian and will keep the Fund's SOL private keys in cold storage with restricted access so no single individual (including Sponsor executives) can access the private keys alone.
Fund may stake SOL and earn rewards
The Sponsor may stake portions of the Fund's SOL through trusted Staking Providers (which may include the Solana Custodian or affiliates) and the Fund would receive staking rewards of SOL that may be treated as income to the Fund. The Sponsor expects to maintain liquidity to satisfy redemptions.
Fund not registered under 1940 Act or as commodity pool
According to the Registration Statement, the Trust and Fund are neither registered as an investment company under the Investment Company Act of 1940 nor a commodity pool under the Commodity Exchange Act, and neither the Trust, the Fund, nor the Sponsor is subject to regulation as a commodity pool operator or a commodity trading adviser in connection with the Shares.
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