The U.S. Securities and Exchange Commission (SEC) issued a notice on April 27, seeking public comment on proposed rule changes submitted by the New York Stock Exchange Arca (NYSE Arca). According to the SEC filing, NYSE Arca is seeking to amend Rule 8.201-E (the general listing framework for commodity trust shares), which provides that at least 85% of a trust’s net asset value must be held in qualified assets permitted under that rule.
Key Provisions of the 85% Asset Threshold
According to the SEC filing, the main provisions of NYSE Arca’s proposed rule are as follows: qualified assets include qualified commodities, commodity-related assets, securities, cash, and cash equivalents; exchange-traded and over-the-counter derivatives are calculated based on total notional value; the sponsor must monitor the 85% threshold on a daily basis, and if the trust no longer meets the requirements, it must notify NYSE Arca immediately.
According to the SEC filing, for crypto assets to meet qualified standards, they must be underlying assets of relevant futures contracts, and those futures contracts must have been traded on a designated market for at least six months, and must be tied to exchange-traded products that provide significant risk exposure.
Product Eligibility Case Examples
According to the cases described in the SEC filing:
Eligible: A trust holding more than 95% of assets comprised of eligible crypto assets such as Bitcoin (BTC), Ether (ETH), Solana (SOL), and XRP
Eligible: A gold-themed trust with all holdings in gold and gold futures
Not Eligible: A trust holding Bitcoin and over-the-counter purchased call options on Bitcoin; if the eligible risk exposure is only about 71%, the eligible Bitcoin position may be offset by the non-eligible derivative
According to the SEC filing, NYSE Arca recommends excluding non-fungible assets (NFTs) and collectibles from the scope of “commodities” as defined in the rule. Such assets cannot qualify through the generic listing route, but NYSE Arca can seek separate approval for them.
SEC Comment Solicitation Process
According to the SEC notice, interested parties may submit written comments to the SEC regarding the rule change, including arguments about whether it satisfies the requirements of the Securities Exchange Act. During its review period, the SEC may approve or reject the proposal, or initiate a hearing procedure on the matter. In its filing, NYSE Arca stated that the 85% threshold is consistent with similar commodity ETPs, and is intended to strengthen the exchange’s ability to monitor trading, curb manipulation, and protect investors.
Frequently Asked Questions
What are the key contents of the NYSE Arca 85% asset rule proposal?
According to the document published by the SEC on April 27, 2026, NYSE Arca plans to amend Rule 8.201-E, requiring that at least 85% of a trust’s net asset value be held in qualified assets, with up to 15% allowed to be invested in other assets that do not qualify on a standalone basis; exchange-traded and over-the-counter derivatives are calculated based on total notional value, and the sponsor must monitor the threshold daily.
How do crypto trusts for Bitcoin and XRP determine whether they meet the 85% eligibility requirement?
According to the SEC filing case examples, if more than 85% of a trust’s assets are eligible crypto assets such as BTC, ETH, SOL, and XRP (i.e., underlying assets of futures contracts traded on a designated market for at least six months), it qualifies for generic listing eligibility. If the trust relies heavily on over-the-counter derivatives and the eligible risk exposure is less than 85%, it does not qualify.
At what stage is the SEC’s current review process?
According to the SEC notice, the SEC is seeking public comment on NYSE Arca’s proposal, and interested parties may submit written comments; during the review period, the SEC may approve or reject the proposal, or initiate a hearing procedure on the matter.
