Key Takeaways
- The decision allows the New York Stock Exchange, Nasdaq, and Cboe Global Markets to adopt generic listing standards for spot ETFs, eliminating the need for a lengthy review
- Under the new framework, qualified products could begin trading in as little as 75 days.
In a major move, the U.S. Securities and Exchange Commission (SEC) voted on Wednesday to approve proposed rule changes by three national securities exchanges, opening the door for dozens of new crypto and other spot commodity exchange-traded products (ETPs).
The decision allows the New York Stock Exchange, Nasdaq, and Cboe Global Markets to adopt generic listing standards for spot ETFs, eliminating the need for a lengthy, case-by-case review. Until now, each application required two separate filings—one from the exchange and one from the asset manager—with a maximum review period stretching up to 240 days. Under the new framework, qualified products could begin trading in as little as 75 days.
The SEC said it found “good cause” to accelerate the approval. “The Commission finds good cause to approve the Proposals prior to the 30th day after the date of publication of notice of the Exchanges’ amended filings in the Federal Register,” the filing stated.
The standards apply to Commodity-Based Trust Shares under Rule 14.11(e)(4). To qualify, a crypto spot ETF must meet one of several criteria: the underlying asset must trade on a market with Intermarket Surveillance Group access; underlie a futures contract listed on a designated market for at least six months with a surveillance-sharing agreement; or already be tracked by an ETF with at least 40% exposure listed on a national exchange.
SEC Chairman Paul Atkins welcomed the move, calling the move a way to “maximize investor choice and foster innovation by streamlining the listing process and reducing barriers to access digital asset products within America’s trusted capital markets.”
Bitwise Chief Investment Officer Matt Hougan said in a note that the standards could “blow the market wide open.” Teddy Fusaro, president of Bitwise, described the approval as “a watershed moment in America’s regulatory approach to digital assets, overturning more than a decade of precedent since the first bitcoin ETF filing in 2013.”
As part of Wednesday’s actions, the SEC also approved the listing and trading of the Grayscale Digital Large Cap Fund. The fund, currently offered over the counter to accredited investors, is composed of nearly 80% bitcoin and 11% ethereum, along with smaller allocations to solana, cardano, and XRP.
However, SEC Commissioner Caroline Crenshaw expressed concern that the fast-tracking process could allow untested products to flood the market. “The Commission is passing the buck on reviewing these proposals and making the required investor protection findings, in favor of fast tracking these new and arguably unproven products to market,” she said.
The latest development comes amid spot ETF applications for the likes of Litecoin,Solana, and Dogecoin await SEC approval.
