Australia is set to get its first bitcoin exchange-traded fund (ETF) after a report indicated that the country’s clearinghouse ASX Clear confirmed that four market participants agreed to meet its strict margin requirements.
Margin requirements for ASX Clear
Australian clearinghouse ASX Clear, which controls access to the country’s equity capital markets, is expected to approve a bitcoin exchange-traded fund (ETF), according to a report. The nod to the so-called Australia’s first bitcoin ETF was made possible after three institutional players and one retail player reportedly agreed to the clearinghouse’s margin requirements.
According to the AFR report, four participants agreed to provide 42% of the required margin before ASX Clear allowed trading in the ETF. This requirement is needed to cover settlement risks associated with Bitcoin, the report said.
“We are now the minimum number of clearing participants, which means we are happy,” ASX Clear chief executive Hamish Treleaven was quoted as saying.
The chief executive added that the clearinghouse would therefore issue a notice giving market participants seven days’ advance notice of ASX Clear’s regulatory approval. The notice is designed to give brokers, clearing houses, investors and market makers time to prepare for the ETF, the report said.
The Cosmos Asset Management Bitcoin ETF will be the only Bitcoin ETF product available when trading begins on April 27 on the Cboe exchange, the report said. Once listed, $1 billion is expected to flow into the Bitcoin ETF.
Meanwhile, the report notes that the approval of the Bitcoin ETF comes two years after the Australian Securities and Investments Commission (ASIC) excluded crypto ETFs from listing in the country. However, the report said the regulator would later change its stance after being pressured by politicians in the country.
As noted in the report, the approval of the Cosmos Asset Management Bitcoin ETF could mean that other exchanges such as NSX could also list a Bitcoin ETF.
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