The United States Securities and Exchange Commission (SEC) has approved generic listing standards to facilitate faster approval of spot crypto ETFs. Under the new standards, each application would not need to be assessed individually.
According to SEC Chair Paul Atkins, the new listing standards will help reduce barriers to accessing digital assets, giving investors more choice in the market.
SEC Approves Generic Listing Standards
The SEC has approved generic listing standards that could help speed up spot crypto ETF approvals. Under the new standards, each application will not have to be assessed individually. The decision was included in SEC filings on Nasdaq, NYSE Arca, and Cboe BZX on Wednesday. It aims to streamline the approval process under Rule 6c-11, thereby substantially reducing approval times. SEC Chair Paul Atkins released a separate statement,
“By approving these generic listing standards, 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 to maximize investor choice and foster innovation by streamlining the listing process and reducing barriers to access digital asset products within America’s trusted capital markets.”
A Long List Of Pending Applications
The approval of generic listing standards comes as several spot ETF applications by Solana, Ripple, and Litecoin await SEC approval. The SEC faces several deadlines in October, including decisions on Avalanche, Chainlink, Polkadot, and BNB. The decision has been hailed by industry experts, who believe it could give the market a bullish push. Bloomberg ETF analyst James Seyffart stated,
“WOW. The SEC has approved Generic Listing Standards for ‘Commodity Based Trust Shares’, aka include crypto ETPs. This is the crypto ETP framework we’ve been waiting for. Get ready for a wave of spot crypto ETP launches in the coming weeks and months.”
However, SEC Commissioner Caroline Crenshaw flagged several concerns about the new listing standards. Crenshaw warned that the new standards could lead to a market flooded with products that haven’t been vetted for investor protection.
“The Commission is passing the buck on reviewing these proposals and making the required investor protection findings, in favor of fast-tracking these new and arguably unproven products to market.”
Clearer Standards
According to the new standards, a spot crypto ETF must hold a commodity that either trades on a market that is part of the Intermarket Surveillance Group to be eligible for listing. Alternatively, the commodity could underlie a futures contract listed on a designated contract market for at least six months, with a surveillance sharing agreement in place. It can also be eligible if it is tracked by an ETF that has at least a 40% exposure on a listed national securities exchange.
Exchanges will be required to submit a rule filing with the Securities and Exchange Commission when looking to list and trade crypto ETFs that do not meet approved listing standards.
The SEC handled spot crypto ETF filings on a case-by-case basis, and required two separate filings, one from the exchange listing the product and the other from the asset manager. The new process cuts the time from filing to launch from a maximum of 240 days to 75 days. Teddy Fusaro, President of Bitwise Asset Management, stated,
“This is a watershed moment in America’s regulatory approach to digital assets, overturning more than a decade of precedent since the first bitcoin ETF filing in 2013.”
ETFs tracking Solana and XRP will likely be the first to launch under the new rules. Asset managers began filing applications for Solana and XRP ETFs over a year ago. However, regulators have been slow to act and have only approved ETFs tracking BTC and ETH. Steve McClurg, CEO of Canary Capital, stated,
“The gates are open, but there’s still a lot of work to be done. Marketing plans, legal filings, and work with service providers all have to be addressed, based on the new roadmap.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice