SEC Stymies Plans to Offer Bitcoin Funds Anytime

[tm_heading tag=”h5″ custom_google_font=”” font_weight=”600″ text=”The Securities and Exchange Commission (SEC) yesterday put the kibosh on plans to offer exchange-traded funds (ETFs) or other products based on bitcoin or cryptocurrencies to retail investors anytime soon.” line_height=”1.4″][tm_spacer size=”lg:25″][tm_heading tag=”div” custom_google_font=”” text=”n a Staff Letter: Engaging on Fund Innovation and Cryptocurrency-related Holdings, Dalia Blass, the SEC ’s Director of the Division of Investment Management, posed 31 detailed questions over how funds would value, store, and safeguard fund holdings, as well as concerns over whether investors understood the risk of these investments, and the potential for market manipulation.”][tm_spacer size=”lg:63″]
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[tm_heading tag=”h5″ custom_google_font=”” font_weight=”600″ text=”Use psychological pricing methods.” line_height=”1.4″][tm_spacer size=”lg:23″][tm_heading tag=”div” custom_google_font=”” text=”The SEC has been skeptical over pressure to launch bitcoin funds to appeal to retail investors, as well as expressed concerns over initial coin offerings, determining that the latter should be treated as securities sales and thus conform with existing investor protection rules, according to the WSJ.”][tm_spacer size=”xs:30;lg:35″][tm_heading tag=”div” custom_google_font=”” text=”Last year, the SEC rejected two proposed ETFs that would directly own bitcoin, including one from Cameron and Tyler Winklevoss, arguing that the global market for the digital currency wasn’t transparent enough to support sufficient oversight.”]
[tm_spacer size=”xs:30;lg:52″][tm_heading tag=”div” custom_google_font=”” text=”Some fund companies hoped that the SEC might relent after two Chicago exchanges late last year launched futures contracts on bitcoin. Those contracts are regulated by the Commodity Futures Trading Commission, a smaller federal agency whose rules allow Wall Street to more easily market new products”][tm_spacer size=”xs:30;lg:68″]
[tm_heading tag=”h5″ custom_google_font=”” font_weight=”600″ text=”Demonstrate the differences” line_height=”1.4″][tm_spacer size=”lg:23″][tm_heading tag=”div” custom_google_font=”” text=”Mutual funds and ETFs must value their assets at the close of each business day to calculate a new asset value (NAV). The staff note that appropriate valuation is important, as it determines fund performance, what investors pay for mutual funds, what authorized participants pay for ETFs, and what they receive when they exit, among other issues.”][tm_spacer size=”sm:30;lg:68″][tm_heading tag=”h5″ custom_google_font=”” font_weight=”600″ text=”Offer a money-back guarantee” line_height=”1.4″][tm_spacer size=”lg:23″][tm_heading tag=”div” custom_google_font=”” text=”The thrust of the CNBC report is that the SEC’s concern is fixated on structure, rather than arises from a more bedrock concern about whether the agency wishes to make it easier for retail investors to enter a market that’s vulnerable to the fraud and manipulation Clayton has outlined.”][tm_spacer size=”sm:30;lg:68″][tm_heading tag=”h5″ custom_google_font=”” font_weight=”600″ text=”Test your offer and price, and be creative.” line_height=”1.4″][tm_spacer size=”lg:23″][tm_heading tag=”div” custom_google_font=”” text=”Just last week, the SEC confounded these expectations, by asking sponsors to withdraw proposals to offer ETFs based on bitcoin futures.”]
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Shareholder Proposals Target Climate Change Risk

[tm_heading tag=”h5″ custom_google_font=”” font_weight=”600″ text=”As the Trump administration has backed away from extending even the modest efforts on climate change initiated by his predecessor– let alone initiating any policy even remotely adequate toward confronting the magnitude of the problem– three types of efforts loom larger.” line_height=”1.4″][tm_spacer size=”lg:25″][tm_heading tag=”div” custom_google_font=”” text=”First, are those by other countries to move away from fossil fuels, toward renewable sources of energy. These are not limited to developed countries, but as I wrote here, now also include China and India, the world’s two most populous countries, each of which is attempting to curtail use of fossil fuels.”][tm_spacer size=”lg:63″]
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[tm_heading tag=”h5″ custom_google_font=”” font_weight=”600″ text=”Use psychological pricing methods.” line_height=”1.4″][tm_spacer size=”lg:23″][tm_heading tag=”div” custom_google_font=”” text=”The Journal notes that last year, three successful proposals at Occidental, Exxon, and PPL “were the first to garner majority votes on resolutions for annual disclosure of the impact on business from global efforts to limit the average rise in temperatures.”][tm_spacer size=”xs:30;lg:35″][tm_heading tag=”div” custom_google_font=”” text=”As investors such as BlackRock look deeper into strategy and climate change issues (and call them out specifically in their shareholder engagement activities), they are increasingly becoming more active in their support for calls for increased transparency and disclosure regarding portfolio companies’ preparedness for climate change.”]
[tm_spacer size=”xs:30;lg:52″][tm_heading tag=”div” custom_google_font=”” text=”EY’s 2017 investor survey on ESG issues found that investors routinely included ESG considerations as part of their investment decisions. Shareholders are not only paying closer attention to non-financial indicators, but they are also more likely to take action on such information.”][tm_spacer size=”xs:30;lg:68″]
[tm_heading tag=”h5″ custom_google_font=”” font_weight=”600″ text=”Demonstrate the differences” line_height=”1.4″][tm_spacer size=”lg:23″][tm_heading tag=”div” custom_google_font=”” text=”According to the study, the percentage of respondents who consider nonfinancial disclosures to be seldom material or have no financial impact dropped from 60% in 2013 to 16% in 2016. “][tm_spacer size=”sm:30;lg:68″][tm_heading tag=”h5″ custom_google_font=”” font_weight=”600″ text=”Offer a money-back guarantee” line_height=”1.4″][tm_spacer size=”lg:23″][tm_heading tag=”div” custom_google_font=”” text=”Furthermore, the report found that, when faced with disclosures of risk or history of poor environmental performance, 15 percent of investors responded that they would rule out the investment immediately, while 76 percent would reconsider the investment.”][tm_spacer size=”sm:30;lg:68″][tm_heading tag=”h5″ custom_google_font=”” font_weight=”600″ text=”Test your offer and price, and be creative.” line_height=”1.4″][tm_spacer size=”lg:23″][tm_heading tag=”div” custom_google_font=”” text=”Similarly, 8 percent of investors responded that they would rule out an investment with disclosures involving risk from climate change, while 71 percent would reconsider the investment.

Actual voting data seems to confirm the study; many shareholders are coming off the sidelines on environmental and social shareholder proposals.”]

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Wizards and Prophets Face Off to Save the Planet

[tm_heading tag=”h5″ custom_google_font=”” font_weight=”600″ text=”For nearly two decades, Charles C. Mann has been troubled by a realization that struck him just after his daughter was born. He was walking outside the hospital on a freezing New England night when the thought stopped him mid stride: By the time she reached his age, there would be 10 billion people living on the planet. How the hell would that work?” line_height=”1.4″][tm_spacer size=”lg:25″][tm_heading tag=”div” custom_google_font=”” text=”Mann makes his living as a science writer and is best known for his bestselling histories of America around 1492. Ever since the night of his daughter’s birth, Mann has asked the scientists he interviewed if he could buy them a cup of coffee afterward in order to ask them his nagging question: What are we going to do as population rises?”][tm_spacer size=”lg:63″]
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[tm_heading tag=”h5″ custom_google_font=”” font_weight=”600″ text=”Use psychological pricing methods.” line_height=”1.4″][tm_spacer size=”lg:23″][tm_heading tag=”div” custom_google_font=”” text=”The responses he got fell into two broad categories depending on the person. The ones who thought technology would save us he dubbed “wizards.” Those who thought we were screwed unless we controlled population growth he called “prophets.””][tm_spacer size=”xs:30;lg:35″][tm_heading tag=”div” custom_google_font=”” text=”After years of these interviews, woolgathering, and worldwide travel, Mann turned it all into his latest book, The Wizard and the Prophet: Two Groundbreaking Scientists and Their Conflicting Visions of the Future of Our Planet. We recently talked with Mann about the types of solutions preferred by wizards and prophets, and why he thinks this division means that no one ever changes their mind about nuclear power, renewable energy, or genetically modified food.”]
[tm_spacer size=”xs:30;lg:52″][tm_heading tag=”div” custom_google_font=”” text=” Well, I coined them as a sort of shorthand. A philosopher friend of mine said that there was a very clear way to describe these groups, one of them is a Schumpeterian–technophiliac–meliorist (laughs). But that didn’t seem all that clear to me, so I call them wizards, as in techno-wizards.”][tm_spacer size=”xs:30;lg:68″]
[tm_heading tag=”h5″ custom_google_font=”” font_weight=”600″ text=”Demonstrate the differences” line_height=”1.4″][tm_spacer size=”lg:23″][tm_heading tag=”div” custom_google_font=”” text=”Wizards basically believe that science and technology, properly applied, can let us produce our way out of our dilemmas. Prophets believe that there are natural limits, and we transgress these limits at our peril.”][tm_spacer size=”sm:30;lg:68″][tm_heading tag=”h5″ custom_google_font=”” font_weight=”600″ text=”Offer a money-back guarantee” line_height=”1.4″][tm_spacer size=”lg:23″][tm_heading tag=”div” custom_google_font=”” text=”Their recommendations are kind of the opposite of each other. One is saying, “Be smart, make more, and that way everyone can win.” The other is saying, “Hunker down, conserve, obey the rules, otherwise everyone is going to lose.””][tm_spacer size=”sm:30;lg:68″][tm_heading tag=”h5″ custom_google_font=”” font_weight=”600″ text=”Test your offer and price, and be creative.” line_height=”1.4″][tm_spacer size=”lg:23″][tm_heading tag=”div” custom_google_font=”” text=”For wizards the answer is basically to stick with the same system we have now but with cleaner energy. Ideally with nuclear power because it has the smallest footprint of any low-carbon source, but you could also have giant concentrated solar plants and that sort of thing.”]
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