OK Computer Power ETF has submitted its third application for an exchange-traded fund tied to compute futures — a type of derivative that isn't currently traded on any market. The repeated filings show the fund manager isn't giving up on creating a product linked to future computing capacity, even though the underlying instrument doesn't exist yet.
What are compute futures?
The applications describe an ETF that would track the price of compute futures. Those would be contracts to buy or sell computing power — things like data processing or cloud capacity — at a predetermined date. But no exchange currently lists such futures. The fund is essentially trying to invent a new asset class before the market for it even opens.
OK Computer Power ETF didn't name an exchange or clearinghouse in the latest filing, but previous documents suggested the product would rely on a yet-to-be-launched index of compute prices. Without actual futures to hold, the ETF can't operate as a standard fund. The SEC has to decide whether to allow a product that references a market that doesn't exist.
Three attempts and counting
This is the third time the fund has asked for permission to list a compute futures ETF. The first two filings didn't result in approval. The new application revises some of the language around how the fund would calculate its net asset value and how it would handle situations where no compute futures are available for trading.
The persistence suggests the fund manager believes there's investor demand for exposure to the economics of computing power. But without a functioning futures market, the SEC may view the product as too speculative or difficult to price. The agency hasn't signaled whether it's any more comfortable with this version than the earlier ones.
What the SEC is looking at
The SEC's review will likely focus on whether compute futures meet the definition of a commodity or a security under existing rules. Futures contracts on new asset classes typically require a designated contract market and sufficient liquidity. Neither exists here. The SEC also has to consider investor protections — how would the fund price shares if there's no benchmark for compute futures?
OK Computer Power ETF's filings argue that a suitable index could be constructed using data from cloud providers and power markets. But the proposal still hinges on futures that no one trades. That's a chicken-and-egg problem: the ETF needs the futures to exist, but the futures may need the ETF to attract liquidity.
No public comments have been filed on the latest application. The SEC typically takes months to review novel products. If approved, OK Computer Power ETF would be the first fund to offer exposure to compute futures — assuming the underlying contracts eventually launch.
The filing is now in the SEC's hands. No decision deadline has been set.
