ProShares Genius Money Market ETF
ProShares filed to launch the "ProShares Genius Money Market ETF," a combination of a money market ETF and a stablecoin reserve fund. The filing says, "ProShares Genius Money Market ETF (the 'Fund') seeks current income consistent with liquidity and preservation of capital.... The Fund intends to operate as a 'government money market fund' pursuant to Rule 2a-7 under the Investment Company Act of 1940, as amended, and as a permissible reserve investment for payment stablecoin issuers under the Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025 ('Genius Act'). As a result, it is subject to related restrictions on its portfolio composition, including that the Fund invests 100% of its assets in (i) cash, (ii) U.S. Treasury bills, notes or bonds, and (iii) overnight repurchase agreements." The filing explains, "Although the Fund will seek to continue to qualify as a 'government money market fund,' it will not seek to maintain a stable net asset value ('NAV') per share using the amortized cost or penny rounding method of valuation. Instead, the Fund will calculate its NAV per share based on the market value of its investments. In addition, unlike a traditional money market fund, the Fund operates as an exchange traded fund ('ETF'). As an ETF, the Fund's shares will be traded on [tbd] and will generally fluctuate in accordance with changes in its NAV per share as well as the relative supply of, and demand for, shares on [tbd]. You could lose money by investing in the Fund. An investment in the Fund is not a bank account and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund's sponsor is not required to reimburse the Fund for losses, and you should not expect that the sponsor will provide financial support to the Fund at any time, including during periods of market stress." It adds, "Shares of the Fund are expected to be held primarily by one or more stablecoin issuers as part of the reserve assets backing their outstanding payment stablecoins. Stablecoins are a type of digital asset designed to maintain a stable value, typically by pegging their value to a fiat currency such as the U.S. dollar. The activities of these issuers may create redemption pressure that could negatively impact the value of the Fund. In particular, during periods of market stress, regulatory uncertainty, or volatility in the digital asset ecosystem, the Fund may experience rapid or unexpected redemption requests. These redemptions could adversely affect the Fund's liquidity, yield, and ability to maintain a stable net asset value, particularly during broader market dislocations."
