More than two dozen prediction-market ETFs already awaiting registration now sit inside a review that could decide whether such products count as investment companies at all.

July 2, 2026

The Securities and Exchange Commission has reopened the rulebook governing exchange-traded funds, launching a 60-day public comment period on June 30 that asks whether a framework written in 2019 can still oversee a market that has swelled past $16 trillion and more than 4,600 listed products.

The core framework, Rule 6c-11, was adopted seven years ago — before spot crypto funds, prediction-market products and high-leverage single-stock strategies became fixtures of the ETF landscape. The commission is seeking input on four categories that are straining the current rules:

• Crypto-asset funds
• Event-contract ETFs tied to prediction markets
• Single-stock strategy funds
• High-leverage products

A market that outgrew its rules

U.S. ETF net assets stood near $4 trillion at the end of 2019 and now exceed $16 trillion, while the number of listed funds has climbed from roughly 1,900 to more than 4,600. That expansion accelerated after Paul Atkins became SEC chair in April 2025 and cleared a run of novel products — including spot funds tied to Solana, Dogecoin and Hype — at a pace the agency’s review machinery was not built to absorb. Atkins has framed the effort as protecting ETF innovation through a consistent, transparent and efficient regulatory approach, without signaling which specific changes he favors.

The 1940 Act question

At the center of the review is whether novel funds should register as investment companies under the Investment Company Act of 1940, a regime built for mutual funds and closed-end vehicles rather than trading-focused crypto or event-contract products. Applying it would impose compliance obligations with little precedent for funds structured around event outcomes.

That question lands directly on the more than two dozen event-contract ETFs submitted for registration in February 2026 by Roundhill Investments, GraniteShares and Bitwise — products that would let investors take positions on outcomes such as U.S. elections and major economic events. The review sets those pending products on a formal track rather than leaving them in limbo.

Why issuers are watching the clock

A procedural point carries immediate weight. Novel ETFs currently reach automatic effectiveness — the ability to begin trading absent explicit sign-off — after defined review windows of 75 and 60 days, and the agency is asking whether those should be lengthened. For managers who rely on that mechanism to reach investors quickly, any extension would slow the pipeline; for regulators facing unfamiliar product types, it would buy evaluation time.

The comment window runs from publication in the Federal Register. Any formal rulemaking would require a fresh proposal, another comment period and a commission vote, pushing new rules to 2027 at the earliest while the pending prediction-market products stay under review.