The three-exchange rule change removes the requirement that commodity-based trusts track an index and lets them run active strategies, opening the door to covered-call and premium-income products.
The SEC gave Cboe BZX, Nasdaq and NYSE Arca the green light to overhaul their commodity-based trust share rules on 29 July, letting up to 15 per cent of a crypto ETF's net asset value sit in assets that fall outside the generic listing standards. The three orders, notice of the last of which appeared in the Federal Register on Monday, also remove the requirement that a commodity-based trust track an index or reference asset. Actively-managed and yield-generating crypto ETFs, including covered-call strategies, principal-protected buffer products and multi-asset index trusts, can now list under the generic standards without a bespoke rule filing.
Mechanically, the change is straightforward. BZX Rule 14.11(e)(4), and its Nasdaq and Arca cousins, previously required an exchange-listed commodity-based trust to hold assets that met a specific eligibility test and to be designed to reflect the performance of a reference asset or index. Both requirements are gone. In their place: an 85 per cent floor for eligible assets, a 15 per cent buffer for non-eligible digital commodities or non-eligible securities, and an explicit endorsement of both passive and active strategies. Derivatives inside the trust are counted at gross notional.
Beyond the buffer, the amendment codifies the SEC's freshly minted definition of a digital commodity into an exchange listing standard for the first time. Under the new Rule 14.11(e)(4)(C)(v), a digital commodity is a commodity that is a digital asset "intrinsically linked to and derives its value from the programmatic operation of a functional crypto system, as well as supply and demand dynamics, rather than from the expectation of profits from the essential managerial efforts of others." Non-fungible tokens are explicitly excluded. The wording lifts language from the joint SEC and CFTC interpretive guidance that took effect on 23 March.
Three approvals arrived within 48 hours of each other. Nasdaq's order (Release 34-105995) was signed on 27 July, NYSE Arca's (34-106001) on 28 July and Cboe BZX's (34-106011) on 29 July. The Commission granted each on an accelerated basis, explaining that the proposals "conform" to changes it had already approved elsewhere. What the SEC has done in three synchronised strokes is finish a project that has been on its calendar since it cleared the iShares Bitcoin Premium Income ETF on 29 May.
Yield-generating crypto ETFs have existed since the first spot bitcoin approvals, but they have been forced through bespoke listing filings that gave BlackRock, T. Rowe Price and Grayscale a de facto moat. The 15 per cent buffer collapses that moat. A covered-call product can now list under the generic standard as long as at least 85 per cent of its NAV sits in eligible commodity holdings. The over-the-counter options that generate the yield count against the 15 per cent bucket. So do positions in less-established digital commodities, provided the trust has a real reason to hold them.
For the active side, the definition swap matters more. The SEC opened a 60-day consultation on novel ETFs on 1 July that asked, among other things, whether commodity-based trusts should be able to switch between assets rather than track an index. That question is now answered. Actively-managed crypto trusts, a category that includes multi-asset index funds like the Bitwise 10 Crypto Index and Grayscale's Digital Large Cap product, can list under the generic standard with the manager free to rebalance without triggering a new 19b-4 filing.
Paul Atkins's SEC has spent most of 2026 clearing bottlenecks rather than writing new rules. The Regulation Crypto rulemaking package remains in consultation, but the pieces that do not require Congress are quietly falling into place. Shelf registration for post-IPO issuers was shortened in May, generic listing standards for crypto ETFs have now been widened, and the joint SEC-CFTC interpretive guidance defines digital commodities in an operational way. The queue that stopped more than a hundred crypto ETF filings from moving faster is coming down.
There are limits. The 15 per cent buffer applies to NAV at the time assets are acquired; a trust that finds itself over the cap because a digital commodity has appreciated must act to bring the trust back within limits within a reasonable time. Derivatives count at gross notional, so an option position with modest premium can consume a large slice of the buffer. Actively-managed strategies still need extensive disclosure and a policy for handling forks and airdrops. The rule opens the door; it does not remove the disclosure obligations that come with walking through it.
Bitwise and Grayscale, the two issuers most reliant on multi-asset crypto index products, both benefit directly from the removal of the tracking requirement. Grayscale's Digital Large Cap and the Bitwise 10 Crypto Index have listed under bespoke standards until now; both can migrate to generic listing under the amended rule. The queue of crypto ETF filings that each product has had to clear one at a time is about to move faster. Whether the products delivered under the new standard prove to be genuine income vehicles or the same yield-hungry structures that broke the money market fund complex in 2008 dressed up in a different asset is the question investors will have to answer over the next quarter.
