The Securities and Exchange Commission has opened a formal review of how it regulates “Novel ETFs,” a category covering crypto-asset funds and products tied to prediction markets, publishing a request for comment as release 33-11426.

The filing seeks comment on ways to facilitate innovation in the ETF space while protecting investors, maintaining fair, orderly and efficient markets, and facilitating capital formation, according to the SEC’s filing. The filing notes that the ETF market has grown significantly since the Commission adopted Rule 6c-11 in 2019 — the exemption that lets most ETFs launch without a bespoke exemptive order — a rule the agency credits with fostering greater competition, innovation and investor choice in the ETF space. Comments are due within 60 days of Federal Register publication.

The review follows a May 20 statement from SEC Chair Paul Atkins, who said fund sponsors had voluntarily delayed the launch of “a number of novel ETFs, including event contract ETFs” while the agency weighed the implications. Atkins said ETF assets had tripled since 2019 and that he had “instructed the staff to seek input from the public on how the Commission should respond to recent market changes.”

Prediction-market ETF applications tied to events like elections and interest-rate decisions have been stuck in the SEC queue since earlier this year, Bloomberg reported, as the agency weighs whether the standard review timeline is adequate for a wave of structurally similar filings.

The pileup coincides with a surge in prediction-market trading volume onchain. Kalshi and Polymarket have expanded rapidly in 2026, with Kalshi closing a $1 billion raise in May at a $22 billion valuation before reportedly seeking a $40 billion mark weeks later. The Defiant has previously covered Kalshi’s push into crypto perpetual futures and broader asset classes following its own $5.5 billion crypto product launch.

Public comments on release 33-11426 can be submitted through the SEC’s comment portal once the 60-day window opens following Federal Register publication, expected in the coming days.