The SEC commission is studying the structure of the Libra cryptocurrency presented by Facebook to determine whether it has signs of a fund traded on the stock exchange (ETF), writes The Wall Street Journal referring to sources familiar with the situation. If Libra is recognized as an ETF, Facebook will have to contact SEC for permission to launch the tool.
According to the WSJ, Facebook has previously contacted the SEC on this issue, but representatives of both sides do not comment on the situation. According to sources, even before the official announcement of Libra, the social network turned to a number of analytical centers, which, under the conditions of non-disclosure of information, were invited to familiarize themselves with a certain project.
Managing Director of ETF.com Dave Nadig believes that the principles of Libra's operation described in white paper really make the tool look like an ETF. Facebook says it will use a basket of real assets, including bank deposits and government securities. The company also intends to attract "authorized resellers" to ensure the stability of the Libra course.
The ETF uses large securities dealers, called “authorized participants”, who similarly buy and sell large blocks of securities directly through the fund and maintain its value close to the rate of the securities held in it.
“Regulators will always study the structures that they are currently regulating. When a new tool is offered, the regulator needs to figure out whether it is like something that it already regulates , ”said ETF expert at law firm Thompson Hine Bibb Strench.
Publication date 07/15/2019
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