SEC Opens 60-Day Comment Period on Novel ETF Structures: What Firms Must Track

The US Securities and Exchange Commission has opened a formal public consultation on how exchange-traded funds that invest in emerging asset classes or use non-standard investment strategies should be regulated. The 60-day window, which begins on publication in the Federal Register, gives accounting firms, fund auditors, and CFOs a narrow but meaningful opportunity to shape the rules before the SEC acts. For practices advising fund clients or auditing crypto-adjacent investment vehicles, the consultation is not background noise; it is a direct signal that the current registration framework may be heading for revision.

Why the SEC Is Reviewing ETF Rules Now

Rapid asset growth has outpaced existing guidance

The SEC's own figures illustrate the scale of the shift. ETF assets under management rose from roughly $4 trillion in 2019 to more than $12 trillion by the end of 2025. That growth has not been uniform: a significant share of new products stretches well beyond plain-vanilla index tracking. Issuers are filing for funds that bundle staking income, stablecoin reserve exposure, options overlays, dividend-to-Bitcoin reinvestment mechanics, and combinations of digital and traditional assets. The existing regulatory architecture was not designed with these structures in mind, and the SEC is now asking whether it needs to be rebuilt, or at least adjusted, before the product pipeline grows further.

The SEC and CFTC are moving in parallel

The novel ETF consultation arrives shortly after a separate joint initiative by the SEC and the Commodity Futures Trading Commission on harmonising portfolio margin rules across securities and derivatives markets. The pairing is deliberate: as ETFs increasingly hold derivatives alongside spot crypto exposure, the boundary between the two regulators' jurisdictions becomes harder to draw cleanly. Firms that advise on fund structures need to watch both tracks.

What the Consultation Actually Covers

Three core questions the SEC wants answered

The request for comment centres on three substantive questions. First, whether existing rules are adequate for ETFs investing in novel asset classes or deploying new strategies. Second, how such funds should be regulated going forward. Third, whether the registration process itself needs to change as new product types enter the market. Responses that address all three will carry more weight with SEC staff than those focused on a single point.

Asset classes explicitly in scope

Although the SEC frames the consultation broadly, recent product filings give a clear indication of the structures under review. Staking-linked ETPs seek to deliver both price exposure and yield from proof-of-stake networks. Stablecoin reserve funds hold the same Treasury instruments and short-duration assets that back regulated payment stablecoins under frameworks like the GENIUS Act. Options-overlay Bitcoin products generate income by systematically writing calls against spot holdings. Hybrid funds combine digital assets with precious metals or mining equities. Each of these raises distinct questions about valuation, liquidity classification, custody, and income recognition that the current ETF rulebook does not answer clearly.

Accounting and Audit Implications

Valuation and fair-value hierarchy

Fund auditors will face heightened scrutiny on fair-value measurement for assets that lack deep, observable markets. Staking rewards, for example, can accrue continuously and their valuation at the reporting date requires a defensible methodology. If the SEC's final rules impose new disclosure requirements around how NAV is calculated for staking or stablecoin reserve funds, the audit procedures supporting those disclosures will need to keep pace. Practices should begin documenting their current valuation approaches for any fund clients holding these instruments, so that adjustments can be made efficiently once final guidance arrives.

Income classification for staking and options strategies

The tax and accounting treatment of staking income distributed through an ETF wrapper remains unsettled. Similarly, the income generated by covered-call strategies embedded in a Bitcoin ETF blends capital and income components in ways that can affect both fund-level reporting and investor-level tax treatment. The SEC's consultation, while focused on securities regulation rather than tax, could produce disclosure rules that have downstream consequences for how firms classify and present these income streams to investors. Auditors advising fund sponsors should flag this to their clients now, rather than waiting for final rules.

Custody and internal controls

Novel ETF structures that hold digital assets directly, or gain exposure through depositary receipts and futures, require custody arrangements that differ materially from those used for equity or fixed-income funds. The SEC may use this consultation to tighten custody requirements for digital-asset ETFs. Accounting firms performing internal control reviews for fund clients should assess whether current custody frameworks would survive a more prescriptive standard. For context on how stablecoin-linked products carry their own compliance exposure beyond the fund structure itself, see our analysis of stablecoin reserve product risk and AML considerations.

How to Engage With the Comment Period

Timing and submission mechanics

The 60-day window runs from the date the SEC publishes the request in the Federal Register. Comments are submitted through the SEC's standard electronic filing system. Accounting firms, audit committees, and trade associations all have standing to respond. Submissions that draw on specific client-facing experience with novel ETF audit or compliance challenges, without disclosing confidential information, tend to be more influential than abstract policy positions.

Points worth raising in a submission

Practitioners who decide to submit a comment might focus on: the gap between current fair-value disclosure requirements and the practical complexity of valuing staking income; the absence of a standardised methodology for auditing NAV in funds with dynamic options overlays; the interaction between SEC custody rules and existing digital-asset custody guidance; and the coordination risk between SEC and CFTC jurisdiction for funds that hold both spot and derivative crypto exposure. Firms that have already developed internal guidance on any of these points are well placed to contribute substantively.

For firms managing broader US regulatory exposure across their crypto client base, our coverage of OFAC cryptocurrency compliance priorities for regulated firms sets out parallel obligations that apply regardless of how the ETF rules evolve.

What Comes Next

Once the comment period closes, the SEC will review submissions before deciding whether to propose formal rule amendments, issue updated guidance, or take no immediate action. Given the pace of product innovation in the ETF market, and the explicit acknowledgment in the consultation that existing rules may not be fit for purpose, some form of regulatory change appears likely. The timeline for any final rule is unclear, but firms that engage now will at minimum understand the direction of travel before their fund clients have to navigate it.

The broader context matters too. The joint SEC and CFTC work on portfolio margin harmonisation suggests a period of coordinated regulatory modernisation across US capital markets. Accounting firms and auditors that treat this as a compliance planning trigger, rather than a distant policy exercise, will be better positioned when the rules land.

Source: Cointelegraph