Generic listing standards for commodities-based ETPs get SEC clearance

The U.S. SEC has officially allowed securities exchanges to use generic listing standards for exchange-traded products that hold spot commodities including digital assets. The development essentially gives a green light to exchanges to list digital assets without having to seek the SEC’s approval each time.

NYSE Arca, Cboe BZX, and Nasdaq have been named as the three national securities exchanges that had proposed the adoption of generic listing standards for commodities-tied ETPs. The aim is to reduce the timeline of SEC approval on the listings of such spot commodities, which would usually take months.

According to SEC Chairperson Paul Atkins, the move is aimed at “maximizing” investor choice in the U.S. capital markets.

“We are ensuring that our capital markets remain the best place in the world to engage in the cutting-edge innovation of digital assets. This approval helps foster innovation by streamlining the listing process and reducing barriers to access digital asset products within America’s trusted capital markets,” Atkins said in his statement.

As part of the generic listing rules, for a crypto spot ETP/ETF to be listed it needs to hold a commodity that either trades on a market that is part of the Intermarket Surveillance Group or is linked to a futures contract — both of which mean that it is linked to a surveillance-sharing agreement.

As an alternative to secure a listing, the ETP/ETF must be tracked by another ETF with at least 40 percent exposure and must already be listed on a national securities exchange.

“The Commission’s approval of the generic listing standards provides much needed regulatory clarity and certainty to the investment community through a rational, rules-based approach to bring products to market while ensuring investor protections,” said Jamie Selway, the director of SEC’s division of trading and markets.

The development comes at a time when the backlog for ETF clearance has been increasing by the day for the SEC. As of September, spot ETF applications for Solana, Ripple, and Dogecoin are awaiting SEC’s approval. The month of October is set to be a crucial one for the digital assets sector as the SEC plans on giving its decision on multiple ETF applications.

The SEC, for now, has cleared he listing and trading of the Grayscale Digital Large Cap Fund, which holds spot digital assets alongside the listing of p.m.-settled options on the Cboe Bitcoin U.S. ETF Index and the Mini-Cboe Bitcoin U.S. ETF Index.