On September 17, 2025, the SEC issued an order approving new “generic” listing standards that are music to the ears of commodity-based exchange-traded products (ETPs), including those backed by crypto assets. Importantly, the order effectively removes a discordant regulatory tool used by the SEC for many years to block crypto ETPs. Now, crypto and other commodity-based ETPs will have a more certain and up-tempo path to market.
Background and Prelude
Before a security can be bought and sold in the secondary market, it must first be approved for listing on a stock exchange. Securities that are not particularly novel or risky will often meet the requirements of approved “generic” listing standards without first submitting a proposed rule change to the SEC.
Shares issued by exchange-traded funds (ETFs) are no different — they must satisfy generic listing rules or seek individual approval from the SEC. Shares of ETFs that are registered and regulated under the Investment Company Act of 1940 (1940 Act) generally meet the requirements of generic exchange listing rules. However, so-called exchange-traded products (ETPs) that invest in currency, commodities (such as gold or spot bitcoin), or commodity-based derivative products such as futures and swaps (such as futures or swaps on agriculture products or bitcoin) are not subject to the 1940 Act and have historically been required to file individual listing applications.
Individual listing applications often proceed at what may be kindly referred to as an andante pace and have historically served as a venue for the SEC to disapprove ETPs that the agency determined were subject to market manipulation. Chief among these have been spot crypto ETPs. The SEC blocked the listing overtures of any spot crypto ETP until 2023, when the D.C. Circuit held that the SEC had acted arbitrarily by disapproving a listing application for a proposed spot crypto ETP while approving comparable futures-based products. The decision effectively handed a libretto to the SEC that it could no longer ignore, compelling the agency to approve spot bitcoin and ether ETPs in 2024.
Most recently, the SEC’s September 17, 2025, action approved generic listing standards for ETPs that qualify as “commodity-based trust shares.”
Which ETPs May Make Quicker Entrance?
The new generic listing standards include requirements regarding a commodity-based ETP’s holdings, website disclosures, liquidity risk, initial and continued listing criteria, firewalls, and other matters. Exchanges will continue to be required to file individual rule change proposals with the SEC when seeking to list and trade commodity-based ETPs that do not meet the generic listing standards, including leveraged and inverse leveraged ETPs.
One of the most important features of the new generic listing rules is a requirement that, in order for an ETP to qualify for automatic listing, a commodity held by the ETP, or a commodity that underlies a derivative, commodity-based asset held by the ETP, must satisfy at least one of three somewhat technical criteria specified in the rules. Additional requirements apply with respect to an ETP’s holdings of equity securities, fixed income securities, and listed options.
Finale
Importantly, while new crypto ETPs must continue to have registration statements declared effective by the SEC, the SEC does not have the broad authority under the new ETP generic listing standards to reject a registration statement on policy grounds that it has with listing proposals. Accordingly, the new rules will likely result in a crescendo of new crypto ETP launches.
