Breaking: CBOE Files For Rule Change To List Crypto ETFs Without SEC Approval

The Chicago Board Options Exchange (CBOE) has filed for a rule change with the US Securities and Exchange Commission (SEC), seeking to allow the generic listing and trading of crypto ETFs. If approved, issuers will sidestep the lengthy application process for a crypto ETF, typically lasting for over 180 days.

CBOE Pushes For Uniform Framework For Crypto ETFs

CBOE has filed a 19b-4 with the SEC for a rule change that can accelerate the approval processes for crypto ETFs.  According to the filing, CBOE is requesting the SEC to permit crypto ETF issuers to rely on standardized frameworks in listing their offerings.

The rule change will apply to commodity-based trust shares, including spot Bitcoin ETFs and a range of similar products. If an approval sails through, there will be no need for specific approvals for each crypto ETF as long as it meets the requirements of the standardized framework.

The SEC has a total of 240 days to issue a decision, which industry experts like Bloomberg analyst James Seyffart say will change the ETF landscape. Currently, CBOE lists several crypto ETFs from a raft of issuers, and an approval of its rule change could see it edge out competitors like NYSE and Nasdaq.

“This is the Framework and Generic listing standards we’ve been looking for with regards to digital assets in an ETF wrapper,” said Seyffart in an X post. “This is a pretty big deal.”

Before CBOE’s filing, reports emerged that the US SEC is probing into the possibilities of slashing crypto ETF listing times to 75 days, replacing the lengthy 19b-4 process. According to the report, the SEC is collaborating with exchanges to develop a streamlined listing standard for crypto ETFs, requiring only an S-1 filing.

A Deep Dive Into The Generic Listing Standard Proposed Amendment

A community reading of the filing revealed that the proposed amendment requires an underlying asset to have a contract on a Designated Contract Market for at least six months before the listing of an issuer’s shares. The proposed rule change makes provision for staking and a liquidity risk management program for the Crypto ETF if under 85% of assets are available for redemption.

Greg Xethalis, lecturing fellow at Duke Law School, revealed in an X post that Solana ETFs, to be approved on October 10, will qualify for the Generic Listing Standards if the SEC greenlights CBOE’s application.

The latest filing comes on the heels of a changing stance by the US SEC in recent months. The SEC has approved in-kind redemptions for Bitcoin and Ethereum ETFs, allowing authorized participants the option to redeem shares with the underlying asset rather than cash.

Xethalis has predicted XRP and Solana ETFs to launch in Q4 with in-kind creation and redemption functionalities. Meanwhile, lawyer Bill Morgan disclosed that the introduction of in-kind creation and redemption may fast-track XRP ETF approvals in the coming weeks.