SEC Opens Comment Period on NYSE Arca Crypto Trust Rule

The U.S. Securities and Exchange Commission has opened a public comment period on a proposal by NYSE Arca to amend its listing standards for commodity-based trust shares, potentially allowing trusts holding digital assets such as Bitcoin, Ethereum, Solana and XRP to qualify more flexibly.

NYSE Arca filed the amendment to Rule 8.201E with the SEC earlier this week, introducing a requirement that at least 85 percent of a trust's net asset value consist of assets meeting existing eligibility criteria. These qualifying assets include commodities, commodity-based products, securities, cash and cash equivalents, with the proposal citing Bitcoin, Ethereum, Solana and XRP as examples because futures contracts on them have traded for at least six months on regulated markets. The remaining 15 percent of holdings may include non-qualifying assets, provided the trust complies with other rules, including daily monitoring of the threshold and prompt notification to the exchange if it falls out of compliance.

The proposal also specifies that listed and over-the-counter derivatives would be measured by aggregate gross notional value rather than market value, which could exclude some...