Cboe Seeks to Streamline Crypto ETF Listings

Cboe Proposes Streamlined Crypto ETF Listings

The Cboe BZX Exchange has submitted a proposal to the SEC that could significantly change how commodity-based trust shares, including spot Bitcoin and Ethereum ETFs, are listed. The proposed rule change aims to allow automatic listings without requiring individual SEC approval for each fund.

Currently, each crypto ETF needs a separate SEC rule change proposal—a process known for being lengthy and subject to political factors. Cboe’s initiative seeks to align the listing process with existing standards for many equity and fixed-income ETFs, potentially reducing time to market.

“This is the Framework and Generic listing standards we’ve been looking for with regards to digital assets in an ETF wrapper,” Bloomberg ETF analyst James Seyffart commented on the filing. “This is a pretty Big deal.”

The proposal outlines a standardized framework for crypto ETFs. Those meeting specific criteria—such as using regulated custodians, maintaining reliable pricing mechanisms, and providing daily holdings disclosures—could be listed via a more efficient process. This would eliminate the need for individual SEC rule change approvals, which are often lengthy and politicized.

Key Components of the Proposed Framework:

• Standardized Criteria: ETFs must meet predefined standards for custody, pricing, and transparency.
• Automated Listing: ETFs meeting criteria can be listed without individual SEC approval.
• Continued Compliance: Trusts must adhere to ongoing listing standards and trading halt rules.

The proposal also establishes ongoing listing standards and trading halt rules. Trusts would need to maintain surveillance procedures and could face delisting if they fail to meet ongoing requirements regarding minimum shares outstanding, market value, and information dissemination.

While the proposal doesn’t mention specific products, it is designed to include future ETFs holding Bitcoin, Ethereum, or other digital assets, provided they meet the established criteria.

According to journalist Eleanor Terrett, the SEC has started preliminary discussions with exchanges about creating a standardized listing framework for crypto ETFs.

The SEC is exploring methods to streamline the approval process, potentially enabling some ETFs to bypass the traditional 19b-4 rule-change filings.

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