The Securities and Exchange Commission has given the green light to a new standard that could accelerate the approval process for Spot Crypto ETFs. This change means that not every application will need a separate evaluation.
As detailed in a recent document, stock exchanges like NASDAQ, NYSE ARCA, and CBOE BZX will now be able to simplify their processes under Rule 6C-11. This could significantly shorten the approval timelines that have dragged on for months.
SEC Chairman Paul Atkins mentioned that by adopting these generic listing standards, “our capital markets will remain the best place in the world to engage in cutting-edge innovation in digital assets.” He expressed that the new standards would enhance investor choices and promote innovation by streamlining the listing process and lowering barriers to accessing digital asset products in U.S. markets.
Applications for Spot ETFs involving assets like Solana (SOL), XRP (XRP), Litecoin (LTC), and Dogecoin (Doge) are currently awaiting official approval.
The SEC has been under a deadline since October to resolve these applications, alongside a few others involving Avalanche (AVAX), ChainLink (LINK), Polkadot (DOT), and BNB.
This development has been viewed positively by many in the industry, including James Seifert, an ETF analyst at Bloomberg, who stated, “This is the Crypto ETP framework we’ve been waiting for.” He expressed optimism that a wave of crypto investment products would likely emerge in the United States soon.
The SEC sets clear standards
For a Crypto Spot ETF to qualify for listing, it should either hold assets traded in markets that are part of an inter-market monitoring group with surveillance access, or be linked to futures contracts listed on a designated market for at least six months with sharing agreements on surveillance.
Alternatively, an ETF might qualify if it has already been tracked by other ETFs with a minimum of 40% exposure listed on a national stock exchange, according to securities regulators.
If an exchange wants to list products traded on crypto platforms that do not meet the approved generic listing standards, it must submit a rules proposal to the SEC.
SEC’s Crenshaw flags investors’ risk concerns
SEC Commissioner Caroline Clenshaw has voiced concerns regarding the new listing standards, warning that they could result in markets being populated with products that haven’t undergone comprehensive vetting for investor protection.
She emphasized the importance of properly reviewing these proposals and establishing necessary protections for investors, thus supporting new, unproven products entering the market.
