Australia is set to get its first bitcoin exchange-traded fund (ETF) after a report suggested the country’s clearinghouse, ASX Clear, confirmed that four market participants agreed to meet its stringent margin requirements.
ASX Clear’s Margin Requirements
An Australian clearinghouse controlling access to the country’s equity capital markets, ASX Clear, is expected to approve a bitcoin exchange-traded fund (ETF), a report has said. The thumbs up to what is said to be Australia’s first bitcoin ETF became possible after three institutional participants and one retail participant reportedly agreed to the clearinghouse margin requirements.
According to an AFR report, the four participants agreed to provide ASX Clear’s required margin of 42% before it allowed trading in the ETF. According to the report, this was required in order for bitcoin traders to be protected from settlement risks.
“We are now at our minimum number of clearing participants and that means we are good to go,” Hamish Treleaven, the CEO of ASX Clear is quoted explaining.
The CEO added that the clearinghouse will consequently issue a notice that gives market participants seven days’ notice of ASX Clear’s regulatory approval. According to the report the notice will give market makers, traders, investors, and clearers time to prepare to receive the ETF.
When trading starts on Cboe’s trading platform on April 27, 2017, the Cosmos Asset management bitcoin ETF will be available. Once it’s listed, there are high expectations that the bitcoin ETF will be worth $1 billion.
The Regulator’s About-Face
The report pointed out that approval of bitcoin ETF was granted two years ago, after ASIC had rejected listing any crypto ETFs. However, the regulator would later shift its position after it was pressured by the country’s politicians, the report said.
The report notes that the approval by Cosmos Asset Management of a bitcoin ETF could mean other trading venues, such as NSX, might list a bitcoin-eligible ETF.
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