Generic Listing Standards For Crypto And Commodity ETPs: What It Means And What's Next

Key Takeaways

• Generic listing standards now allow qualifying crypto and commodity exchange-traded products to list without inpidual SEC approval.
• The new generic listing standards will result in significant time and cost savings for ETP issuers meeting the new criteria.
• Actively managed, leveraged, and novel-feature ETPs still require traditional 19b-4 approval.

Introduction

On September 17, 2025, the Securities and Exchange Commission approved proposed rule changes by three national securities exchanges to adopt generic listing standards (the "Generic Standards") for ETPs that hold spot commodities, including crypto assets.¹ The rule changes significantly ease the path forward for many crypto ETP issuers in particular, although some ETPs still remain outside the scope of the Generic Standards and will continue to require separate listing approval by the Commission.

Background: Rule 19b‑4 and Crypto ETPs

Section 19(b) of the Securities Exchange Act requires self‑regulatory organizations — including national securities exchanges — to obtain SEC approval for changes to their rules. Historically, when a national securities exchange sought to list and trade a crypto ETP, the exchange was required to file a separate proposed rule change on Form 19b-4 for SEC approval specific to that particular ETP. The SEC would then review the proposal under the Exchange Act, particularly under Section 6(b)(5) of the Exchange Act, which requires, among other things, that an exchange's rules be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest.

The SEC's review of many exchange proposals to list and trade shares of crypto ETPs had previously resulted in rejection on the ground that the listing exchange did not have sufficient means to check fraud and manipulation in the underlying crypto asset because it did not have a comprehensive surveillance-sharing agreement with a regulated market of significant size trading the crypto asset.² That position changed following a ruling of the U.S. Court of Appeals for the District of Columbia Circuit in August 2023,³ and the Commission subsequently approved a number of bitcoin and ether-based ETPs.⁴ More recently, the Commission has received a significant volume of proposals by various exchanges to trade a range of new crypto ETPs. Review of these proposals was often time consuming, and could significantly delay the launch of a new crypto ETP. The high volume of new proposals, as well as the Commission's increasing familiarity with the questions posed by crypto ETPs, may be among the reasons that led the Commission to formulate the Generic Standards for crypto ETPs. Put simply, if a crypto ETP meets the Generic Standards, the exchange may proceed to list and trade the ETP without going through the separate SEC approval process for each ETP.

The SEC's Approval and the Generic Standards

The SEC approved three substantially similar proposals from the exchanges to create generic initial and continued listing standards for "Commodity‑Based Trust Shares."⁵ Each proposal sets forth eligibility criteria that must be met for the Commodity-Based Trust Shares to be listed and traded. Specifically, each commodity held by a trust, limited liability company, or other similar entity ("Trust"), or commodity that underlies a commodity-based asset held by a Trust, must meet at least one of the following criteria:

• On an initial and continuing basis, the commodity trades on a market that is an Intermarket Surveillance Group ("ISG") member, provided that the exchange may obtain information about trading in such commodity from the ISG member;
• On an initial and continuing basis, the commodity underlies a futures contract that has been made available to trade on a designated contract market ("DCM")⁶ for at least six months; provided that the exchange has a comprehensive surveillance sharing agreement ("CSSA"), whether directly or through common membership in ISG, with such DCM; or
• On an initial basis only, an exchange-traded fund ("ETF") designed to provide economic exposure of no less than 40% of its net asset value to the commodity lists and trades on a national securities exchange.

In addition, to the extent a Trust holds securities:

• each equity security held by a Trust must meet the exchange's requirements for equity component securities underlying "Managed Fund Shares" generically listed on the exchange;
• each fixed income security held by a Trust must meet the exchange's requirements for fixed income component securities underlying Managed Fund Shares generically listed on the exchange; and
• if the security is a listed option, it must trade on an ISG market.

The proposals also identify certain additional requirements which must be met in order to generically list and trade shares of any ETP. These include:

Disclosure: A Trust must disclose prominently on its public website, certain information items including:

• its ticker symbol;
• identifier;
• description of the holding(s);
• the quantity of each commodity, commodity-based asset, security, cash, and cash equivalents held;
• percentage weighting of the Trust's assets;
• its current net asset value ("NAV") per share, market price, and premium or discount, each as of the end of the prior business day;
• information regarding the trading of the Trust's shares at a premium or a discount;
• information regarding the Trust shares' median bid-ask spread;
• liquidity risk policies and procedures (discussed below);
• its methodology for the calculation of its NAV;
• its trading volume for the previous day; and
• its effective prospectus, in a form available for download.

Liquidity Risk Policies and Procedures: The Generic Standards require that, if a Trust has on a daily basis less than 85% of its assets readily available⁷ to meet redemption requests, the Trust must have written liquidity risk policies and procedures reasonably designed to address the risk that it fails to redeem its shares without significant dilution of remaining shareholders' interest in the Trust. Such policies and procedures must be at least annually reviewed by the Trust and must address:

• The Trust's investment strategy and liquidity of the Trust's assets during normal and stressed conditions, including holdings in derivatives and whether the investment strategy is appropriate for effective and efficient arbitrage;
• Holdings of cash and cash equivalents, as well as borrowing arrangements and other funding sources; and
• The percentage and description of the Trust's assets that are segregated, pledged, hypothecated, encumbered, or otherwise restricted or prevented from being liquidated, sold, transferred, or assigned.

Initial and Continuing Listing Criteria: The Generic Standards set forth initial listing requirements for Commodity-Based Trust Shares, including a minimum number of Commodity-Based Trust Shares outstanding at the time trading commences on the exchange and a stated investment objective, which must be adhered to under normal market conditions. Each proposal also sets forth continued listing requirements for the generic listing and trading of Commodity-Based Trust Shares, and requires an issuer of Commodity-Based Trust Shares to promptly notify the exchange of any non-compliance with any of the applicable continued listing standards set forth in the proposed rule. These continuing listing standards include, for example, the maintenance of surveillance procedures for Commodity-Based Trust Shares.

Trading Halts: The Generic Standards identify circumstances in which an exchange will halt trading in Commodity-Based Trust Shares, for example, where there is an interruption to the dissemination of the underlying reference asset(s) or index value.

Market Maker Requirements: The Generic Standards would retain existing exchange rules requiring registered market makers in Commodity-Based Trust Shares to file and maintain a list identifying all accounts for trading in each underlying commodity and commodity-based asset. Market makers must also make books, records and other data on trading the underlying commodity or commodity-based asset available to the exchange.

Firewall Requirements: The Generic Standards require the exchanges to implement and maintain firewalls and policies and procedures to prevent the use and dissemination of material, non-public information and fraudulent or manipulative acts or practices.

The exchanges will consider the suspension of trading in, and the delisting of, Commodity-Based Trust Shares that do not comply with the Generic Standards.

The Path Forward for Crypto ETPs

The Generic Standards are likely to result in significant time and cost savings for issuers of Commodity Trust Shares that meet the Generic Standards — both for crypto-based ETPs and for commodity-based ETPs more generally. Importantly, qualification for the Generic Standards depends on the specific underlying crypto asset or commodity held by the ETP, as each asset must inpidually satisfy the surveillance-sharing and market criteria outlined above. This means that while ETPs that propose to hold bitcoin, ether, and certain other crypto assets can readily qualify given established futures markets and surveillance arrangements, ETPs based on other crypto assets may not meet the Generic Standards if those assets lack adequate regulated market infrastructure or surveillance-sharing agreements.

Note, however, that the Generic Standards have no bearing on registration under the Securities Act of 1933 or Exchange Act reporting. Even if an ETP qualifies for generic listing under the Generic Standards, issuers still must file and maintain an effective registration statement, which remains subject to the SEC's review and comment process. Recent changes to the SEC's Rules of Practice, however, have also reduced the uncertainty crypto-backed ETP issuers may have previously faced with respect to the effectiveness of their registration statements.⁸ Issuers must also provide ongoing disclosures under the Exchange Act. Nor do the Generic Standards limit the SEC's or the listing exchange's ability to intervene if a listed product later fails to meet the Generic Standards or raises investor protection concerns.

While the Generic Standards are significant and broad-ranging, they continue to exclude certain types of crypto-based ETPs and other commodity ETPs. For example, actively managed ETPs, whether crypto-based or otherwise, fall outside the Generic Standards and will need to go through the 19b-4 process, as before. Leveraged or inverse leveraged ETPs are similarly outside of the Generic Standards and will also continue to require 19b-4 approval. So will products which hold only one or more assets that are traded on markets or venues lacking adequate surveillance‑sharing (such as, for example, certain crypto products that may trade only on decentralized exchanges). Crypto products with novel features such as lending, staking, revenue‑sharing, or rehypothecation of trust assets will also continue to need to seek inpidual approvals.

For investors, the introduction of the Generic Standards promises greater access and competition among commodity trusts, including trusts that hold one or more crypto assets. We expect an increase in ETP listings as a result of the Generic Standards and, over time, greater harmonization of exchange interpretations of these standards. Issuers should consider creating checklists and compliance monitoring to ensure they comply with the Generic Standards at all times.

Footnotes

1. Securities Exchange Act Release No. 34-103995; File Nos. SR-NASDAQ-2025-056; SR-CboeBZX-2025-104; SR-NYSEARCA-2025-54; Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Cboe BZX Exchange, Inc.; NYSE Arca, Inc.; Order Granting Accelerated Approval of Proposed Rule Changes, as Modified by Amendments Thereto, To Adopt Generic Listing Standards for Commodity-Based Trust Shares; 90 Fed. Reg. 45414 (September 22, 2025).

2. See Securities Exchange Act Release No. 83723 (July 26, 2018), 83 FR 37579 (August 1, 2018) (SR-BatsBZX-2016-30) (Order Setting Aside Action by Delegated Authority and Disapproving a Proposed Rule Change, as Modified by Amendments No. 1 and 2, to List and Trade Shares of the Winklevoss Bitcoin Trust) ("Winklevoss Order"). In the Winklevoss Order, the Commission set forth both the importance and definition of a surveilled, regulated market of significant size, explaining that, for approved commodity-trust ETPs, "there has been in every case at least one significant, regulated market for trading futures on the underlying commodity—whether gold, silver, platinum, palladium, or copper—and the ETP listing exchange has entered into surveillance-sharing agreements with, or held Intermarket Surveillance Group membership in common with, that market." Winklevoss Order, 83 Fed. Reg. at 37594.

3. Grayscale Investments, LLC v. SEC, 82 F.4th 1239 (D.C. Cir. 2023).

4. See Securities Exchange Act Release No. 34-99306 (January 10, 2024), 89 FR 3008 (January 17, 2024) (SR-NYSEARCA-2021-90; SR-NYSEARCA-2023-44; SR-NYSEARCA-2023-58; SR-NASDAQ-2023-016; SR-NASDAQ-2023-019; SR-CboeBZX-2023028; SR-CboeBZX-2023-038; SR-CboeBZX-2023-040; SR-CboeBZX-2023-042; SRCboeBZX-2023-044; SR-CboeBZX-2023-072) (Order Granting Accelerated Approval of Proposed Rule Changes, as Modified by Amendments Thereto, to List and Trade Bitcoin-Based Commodity-Based Trust Shares and Trust Units); Securities Exchange Act Release No. 100224 (May 23, 2024), 89 FR 46937 (May 30, 2024) (SR-NYSEARCA-2023-70; SR-NYSEARCA-2024-31; SR- NASDAQ-2023-045; SR-CboeBZX-2023-069; SR-CboeBZX-2023-070; SR-CboeBZX-2023-087; SR-CboeBZX-2023-095; SR-CboeBZX-2024-018) (Order Granting Accelerated Approval of Proposed Rule Changes, as Modified by Amendments Thereto, to List and Trade Shares of Ether-Based Exchange-Traded Products).

5. The Generic Standards define the term "Commodity-Based Trust Share" as a security that:

• Is issued by a Trust (as defined below) that, if applicable, is operated by a registered commodity pool operator pursuant to the Commodity Exchange Act, and is not registered as an investment company pursuant to the Investment Company Act of 1940, or series or class thereof;
• Is designed to reflect the performance of one or more reference assets or an index of reference assets;
• In order to reflect such performance, is issued by a Trust that holds (i) one or more commodities or commodity-based assets, and (ii) in addition to such commodities or commodity-based assets, may hold securities, cash, and cash equivalents;
• Is issued by a Trust in a specified aggregate minimum number in return for a deposit of (i) a specified quantity of the underlying commodities, commodity-based assets, securities, cash, and cash equivalents or (ii) a cash amount with a value based on the next determined net asset value per Trust share; and
• When aggregated in the same specified minimum number, may be redeemed at a holder's request by a Trust which will deliver to the redeeming holder (i) the specified quantity of the underlying commodities, commodity-based assets, securities, cash, and cash equivalents or (ii) a cash amount with a value based on the next determined net asset value per Trust share.

6. The term "designated contract market" means a board of trade or exchange that has been designated as a contract market under Section 5 of the CEA and operates under the regulatory oversight of the Commodity Futures Trading Commission, pursuant to Section 5 of the Commodity Exchange Act.

7. Under the Generic Standards, an asset is deemed not readily available to meet redemption requests if it is segregated, pledged, hypothecated, encumbered, or otherwise restricted or prevented from being liquidated, sold, transferred, or assigned within one business day.

8. For more details on the SEC's Rules of Practice, see our prior Dechert OnPoint, SEC Open Meeting: Form PF Compliance Date Pushed Again and SEC Housekeeping (September 24, 2025).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.