The U.S. Securities and Exchange Commission has opened a public comment period on a proposed rule change from NYSE Arca that could materially alter how crypto and commodity trust products qualify for exchange listing. At the center of the filing is an 85% asset eligibility threshold, a standard that would require most of a trust’s net asset value to be invested in assets already recognized under the exchange’s listing framework.
While the proposal is not limited to digital assets, its practical significance for the crypto market is clear. Products linked to bitcoin, ether, solana, and XRP could be affected depending on how their portfolios are structured, especially if sponsors rely on options, futures, or over-the-counter derivatives to create or enhance exposure. The SEC is now evaluating whether the proposed rule is consistent with the Securities Exchange Act, and market participants have been invited to submit comments.
The Core of the Proposal
NYSE Arca is seeking to revise Rule 8.201-E, the exchange’s generic listing standards for Commodity-Based Trust Shares. Under the proposed change, at least 85% of a trust’s net asset value would need to be held in assets that already qualify under the rule. Those eligible assets may include commodities, commodity-related assets, securities, cash, and cash equivalents.
The remaining 15% could be allocated to other assets that do not independently satisfy the exchange’s eligibility standards, so long as the trust as a whole remains compliant. In effect, the proposal would allow a degree of portfolio flexibility while still requiring the majority of a product’s exposure to be tied to assets that fit within an established surveillance and regulatory framework.
That balance appears central to the exchange’s argument. NYSE Arca presents the proposal as a way to support broader product listings without abandoning market oversight principles. By preserving some room for non-qualifying holdings while setting a firm cap, the exchange is attempting to draw a clearer boundary around acceptable portfolio construction.
Why Derivatives Matter So Much
One of the most consequential elements of the filing is how derivatives would be measured. The proposal says that both exchange-listed and over-the-counter derivatives would be counted using their gross notional value. That methodology could make a major difference in whether a trust passes the 85% test, because derivatives can create exposure that far exceeds their cash outlay or accounting footprint.
For crypto-linked products, this point is especially important. A trust that appears conservative on the surface could fail the listing standard if a meaningful part of its economic exposure comes from instruments that do not meet the exchange’s eligibility criteria. This means sponsors would need to assess not just the assets they hold outright, but also the size and structure of any derivative overlays.
The filing offers examples that illustrate the distinction. A trust whose value is 95% composed of assets such as bitcoin, ether, solana, and XRP could qualify under the proposed framework, provided those assets meet the rule’s conditions. In the filing, those assets are considered eligible because they are underlying assets for futures contracts that have traded on designated markets for at least six months and are associated with exchange-traded products that provide meaningful exposure.
By contrast, a trust holding bitcoin alongside an over-the-counter call option on a bitcoin ETF could run into trouble. In the example described by the filing, only about 71% of the trust’s exposure would qualify, causing the product to fail the standard. The implication is straightforward: even if a trust owns a qualifying crypto asset directly, non-qualifying derivative positions can dilute compliance enough to block listing eligibility.
A More Structured Path for Crypto Trusts
The proposal suggests that the market may be moving toward a more mature but more tightly defined listing regime for digital asset products. For issuers, the message is not necessarily that innovation is being shut down. Rather, innovation may increasingly need to fit inside a framework that is easier for exchanges and regulators to monitor on an ongoing basis.
If adopted, the rule would also create a continuing compliance obligation. Sponsors would be expected to monitor the 85% threshold on a daily basis, and if a trust fell out of compliance, NYSE Arca would need to be notified immediately. This introduces an operational burden in addition to the initial listing test, especially for products using actively managed exposure or complex derivative strategies.
For crypto issuers considering future ETF or trust structures, that may influence product design from the outset. Portfolios that rely heavily on OTC instruments or bespoke exposure tools could become less attractive under a framework that penalizes non-qualifying components based on gross notional value rather than a narrower accounting measure.
NFTs and Collectibles Excluded From the Generic Route
The filing also draws a line around what the exchange wants the generic listing standard to cover. NYSE Arca proposes excluding non-fungible assets and collectibles from the definition of commodities for purposes of the rule. That means trusts tied to NFTs or similar collectible-style assets would not be able to use the streamlined generic listing pathway.
This does not necessarily amount to a total ban on such products. The exchange notes that issuers could still seek individual approval for trusts involving those assets. However, they would not benefit from the more standardized route available to products that fit within the proposed commodity trust framework. The distinction reinforces the idea that generic standards are being reserved for assets with more established pricing, surveillance, and market infrastructure.
Competition, Oversight, and Investor Protection
NYSE Arca argues that the 85% threshold is consistent with similar frameworks used for other commodity-based exchange-traded products. In the exchange’s view, the proposed rule change would improve its ability to surveil trading, deter manipulation, and protect investors, while still allowing more products to come to market. The filing also states that the change would not impose any unnecessary or inappropriate burden on competition.
That competitive argument is notable. The exchange is effectively saying that clearer and more uniform standards could help issuers understand what kinds of products are likely to qualify, reducing uncertainty while preserving market integrity. If regulators agree, the result could be a more predictable listing environment for mainstream crypto trust products—even if it becomes harder for more exotic structures to pass through the generic route.
For investors, the proposal may represent a tradeoff. On one hand, a wider range of products could become possible under a rule designed to accommodate some limited exposure to non-qualifying assets. On the other, the rule would draw firmer boundaries around leverage, derivative complexity, and unconventional holdings. That may reduce the risk that a listed product masks substantial exposure to instruments that are harder to supervise.
What Comes Next
The SEC has not yet decided whether to approve or reject the proposal. As part of the review process, the agency may also institute further proceedings, including a hearing process, before reaching a final determination. Public comments will likely play an important role, particularly from exchanges, issuers, market structure experts, and legal analysts focused on the treatment of crypto-linked products under existing securities law.
The broader significance of the proposal goes beyond a technical amendment to exchange rules. If approved, it could influence how future U.S. crypto investment vehicles are built, marketed, and managed. It may also affect the practical listing path for products linked to bitcoin and XRP, as well as other digital assets that meet the framework’s underlying market criteria.
At a policy level, the filing reflects a familiar regulatory trend: greater openness to digital asset products, paired with stricter controls around how risk exposure is measured and disclosed. Rather than shutting the door on crypto trusts, the proposal points toward a system in which access is conditioned on tighter rules, more transparent construction, and stronger ongoing compliance.
Whether that becomes the new standard now depends on the SEC’s review. For the crypto ETF market, the outcome could shape not only which products list next, but also what types of structures are considered acceptable in the years ahead.