New SEC Standards for Commodity-Based Trusts

The U.S. Securities and Exchange Commission (SEC) approved new generic listing standards for commodity-based trusts on Wednesday. Analysts believe this move could significantly expand the range of crypto products available beyond just Bitcoin and Ethereum.

Approved Standards

The new standards apply to Nasdaq, Cboe BZX, and NYSE Arca, allowing trusts that meet specific criteria to list without a separate order from the Commission. Although leveraged and inverse structures are prohibited, this creates a faster pathway for commodity or crypto-linked products to qualify.

Eric Balchunas, a senior ETF analyst at Bloomberg Intelligence, commented that about 12 to 15 cryptocurrencies are now poised for listing. He suggested that these new listings could arrive in waves, indicating a significant expansion from the current options registered under the Securities Act of 1933 (the ’33 Act).

Investor Impact

According to Balchunas, the new regulations will lead to the availability of lower-fee, regulated 33 Act spot ETFs for investors, creating a more competitive marketplace.

The SEC stated that these rules aim to prevent fraudulent practices while enhancing market transparency and investor protection. The standards mandate that underlying assets be traded on monitored markets with established futures history or have significant exposure through existing ETFs.

Requirements and Future Outlook

Trusts must disclose daily holdings, net asset values, and liquidity policies. Market makers will also have to adhere to trading limits to ensure the integrity of non-public information.

Balchunas believes this action by the SEC heralds the broadest expansion of crypto ETFs since the advent of spot Bitcoin products last year. He anticipates that Solana and Litecoin will lead the upcoming approval wave, possibly within a month, while Dogecoin may follow shortly thereafter. An XRP ETF may experience delays due to the maturity of its futures market.