The US Securities and Exchange Commission has approved new standards that may expedite the approval process for spot crypto ETFs, allowing applications to be evaluated collectively rather than individually.
This decision, outlined in SEC filings concerning stock exchanges such as Nasdaq, NYSE Arca, and Cboe BZX, was made on Wednesday. It streamlines the process under Rule 6c-11, significantly cutting down approval times, which have historically taken several months.
“The approval of these generic listing standards ensures that our capital markets remain the premier venue for engaging with the innovative landscape of digital assets,” SEC Chair Paul Atkins remarked in a separate statement.
“This approval maximizes investor choice and promotes innovation by simplifying the listing process and lowering access barriers to digital asset products within America’s trusted capital markets.”
This announcement comes as spot ETF applications for assets like Solana (SOL), XRP (XRP), Litecoin (LTC), and Dogecoin (DOGE) await formal approval.
The SEC faces deadlines starting in October to finalize decisions on these applications, along with others for assets including Avalanche (AVAX), Chainlink (LINK), Polkadot (DOT), and BNB (BNB).
This development has been perceived as optimistic by many in the industry, including Bloomberg ETF analyst James Seyffart, who noted: “This is the crypto ETP framework we’ve been anticipating.”
He expects a surge of crypto investment products to be introduced in the US soon.
SEC outlines clear standards
To qualify for listing, a crypto spot ETF must hold a commodity that is either traded on a market that participates in the Intermarket Surveillance Group with surveillance access, or that underlies a futures contract on a designated market for a minimum of six months with an existing surveillance-sharing agreement.
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Alternatively, it may qualify if it is already associated with an ETF that has at least 40% exposure listed on a national securities exchange, according to the securities regulator.
An exchange must submit a rule filing to the SEC when seeking to list and trade crypto exchange-traded products that do not comply with the approved generic listing standards.
SEC’s Crenshaw highlights investor risk concerns
SEC Commissioner Caroline Crenshaw voiced concerns regarding the new listing standards, cautioning that they could lead to a surge of products lacking thorough vetting for investor protection.
“The Commission is avoiding its responsibility to review these proposals and make necessary investor protection assessments, in favor of rapidly bringing these potentially unproven products to market.”
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