SEC Reviews NYSE Arca Proposal on Crypto ETF Asset Eligibility

The United States Securities and Exchange Commission (SEC) has officially requested public commentary regarding a proposed rule change submitted by NYSE Arca. The proposal focuses on the "85% asset rule," a regulatory framework that could significantly redefine the listing structure for exchange-traded funds (ETFs) and commodity trust shares tied to digital assets. This move aims to expand the variety of investable products while maintaining strict oversight of the underlying holdings within these financial vehicles.

Defining Eligibility for Digital Asset Exposure

Under the proposed guidelines, a commodity trust must ensure that at least 85% of its total assets meet specific eligibility criteria. To qualify as an eligible asset, a cryptocurrency—such as Bitcoin (BTC), Ethereum (ETH), Solana (SOL), or XRP—must have had futures contracts traded on designated regulated markets for a minimum of six months. Additionally, these assets must already be represented by exchange-traded products that offer substantial market exposure.

• Derivatives are to be calculated on a gross notional basis to ensure transparency.
• Non-fungible tokens (NFTs) and physical collectibles are explicitly excluded from eligibility.
• Assets must demonstrate a track record in regulated futures markets to be considered for the 85% threshold.

Impact on Over-the-Counter and Derivative Trusts

The proposal introduces rigorous standards for trusts utilizing over-the-counter (OTC) instruments. For instance, if a trust holds OTC call options on Bitcoin or existing Bitcoin ETFs, the current calculation suggests that only approximately 71% of that exposure would qualify under the new rules. This specific provision would render such trusts ineligible for listing under the proposed 85% mandate, as they would fail to meet the minimum threshold for monitorable, regulated assets. The primary objective of NYSE Arca is to facilitate a broader range of product listings while ensuring the majority of exposure remains within monitorable and liquid markets.

The proposal aims to allow more products to be listed while limiting most exposure to monitorable assets.

The SEC’s notice marks the beginning of a formal review period during which the regulator may approve, disapprove, or initiate further proceedings to determine the proposal's consistency with the Securities Exchange Act. As of April 28, 2026, the crypto industry awaits the outcome, which could pave the way for more complex multi-asset ETFs or restrict the use of certain derivative-heavy structures in the public markets.