U.S. Securities & Exchange Commission approves generic listing standards for commodity-based ETPs including crypto asset commodities

The U.S. Securities & Exchange Commission approved rule changes establishing generic listing and trading standards on three national securities exchanges for certain commodity-based exchange-traded products, including ETPs holding crypto asset commodities. Qualifying ETPs will be able to list without separate Commission approval for each product under Exchange Act Section 19(b). Under the new approach, an ETP that meets the generic listing standards can commence trading without a prior Rule 19b-4 approval, and the exchange must post specified information about the ETP on its website within five business days after trading begins. Eligibility for an ETP’s underlying holdings can be met if the commodity trades on a market that is an Intermarket Surveillance Group member, or if it underlies a futures contract that has traded for at least six months on a CFTC-regulated designated contract market; alternatively, if an exchange-traded fund providing no less than 40 percent of its net asset value exposure to a commodity lists and trades on a national securities exchange, ETPs providing exposure to the same commodity can also list under the generic standards. ETPs that do not meet the standards will still require an exchange rule filing with the Commission. The statement notes exchanges may consider expanding eligibility criteria over time, including by proposing objective quantitative standards as another eligibility option.