The New York Stock Exchange LLC filed a proposed rule change with the Securities and Exchange Commission on December 10, 2025, seeking to adopt new Rule 8.201 (Generic). This rule would establish generic listing standards for Commodity-Based Trust Shares, allowing their listing and trading on the exchange without prior SEC approval for qualifying products. Published in the Federal Register on December 30, 2025, the proposal draws from similar rules on NYSE Arca, aiming to reduce listing timelines and costs while promoting competition. The significance lies in facilitating broader access to commodity-linked investment vehicles, potentially benefiting investors by expanding product options in a regulated framework.
Background and Purpose
The proposal introduces generic criteria under Rule 8.201 (Generic) for Commodity-Based Trust Shares, which are securities issued by trusts holding commodities or related assets to track their performance. Unlike traditional ETFs, these trusts are not registered under the Investment Company Act of 1940 but may operate as commodity pools under the Commodity Exchange Act. Currently, such shares require individual SEC filings under Section 19(b) of the Securities Exchange Act of 1934. The new rule would leverage Rule 19b-4(e), permitting listing without separate proposals if standards are met, similar to rules for other exchange-traded products like Managed Fund Shares under NYSE Rule 8.600.
This aligns with precedents on NYSE Arca, where Rule 8.201-E (Generic) was approved by the SEC to expedite listings. The NYSE filing notes that the proposal mirrors NYSE Arca's rule with minor adjustments, such as referencing NYSE-specific terms. Key players include the NYSE as the self-regulatory organization, the SEC as the oversight body, and potential issuers like trusts managed by commodity pool operators. The goal, as stated in the filing, is to 'significantly reduce the time frame and costs associated with bringing these securities to market,' fostering competition among issuers.
Key Definitions and Eligibility Criteria
Commodity-Based Trust Shares are defined in the proposal as securities issued by a trust that holds commodities, futures, options, or swaps thereon, along with securities, cash, and cash equivalents. The term 'commodity' excludes financial instruments like securities or currencies, focusing on physical or derivative-based assets under the Commodity Exchange Act.
Eligibility requires that underlying commodities or assets meet one of three criteria: trading on an Intermarket Surveillance Group member market, underlying a futures contract available for at least six months on a designated contract market with surveillance sharing, or having at least 40% exposure in an exchange-traded fund. Securities held must comply with standards akin to those in Rule 8.600 for Managed Fund Shares. These criteria aim to ensure market integrity and prevent manipulation, drawing from SEC approvals of similar products, such as spot bitcoin ETFs in 2024, which emphasized surveillance agreements.
Disclosure and Liquidity Requirements
The proposal mandates robust transparency. Trusts must disclose daily on their websites details like holdings, net asset value, market price, premiums or discounts, and median bid-ask spreads. For liquidity, if less than 85% of assets are readily available for redemptions, trusts must implement written policies addressing risks, including during stressed conditions. This provision accommodates practices like protocol staking for crypto assets, per SEC staff guidance from May 2025.
Continued listing standards include minimum holders, outstanding shares, and market value thresholds after an initial 12-month period. The exchange can halt trading if values or disclosures falter, ensuring ongoing compliance. These elements reflect lessons from past SEC orders, such as those for commodity ETFs, where inadequate disclosure led to rejections or delays.
Surveillance and Market Protections
Surveillance is central, with requirements for information sharing via ISG or direct agreements. Firewalls are mandated for affiliated entities influencing commodity prices, preventing misuse of non-public information. Market makers must disclose accounts in underlying assets to avoid conflicts. These measures address political concerns over market manipulation, as seen in debates during the approval of ether-based products in 2024, where regulators balanced innovation with oversight.
Different perspectives emerge: proponents, including exchange officials, argue it enhances efficiency and investor access without compromising safety. Critics, potentially from consumer advocacy groups, might worry about increased retail exposure to volatile commodities. The filing cites no specific comments yet, but the SEC solicits input, indicating an open process.
Implications and Perspectives
Short-term, the rule could accelerate listings, potentially increasing trading volume on NYSE. Long-term, it may standardize commodity products across exchanges, reducing fragmentation. However, it raises questions on regulatory burden if non-compliant products proliferate. Politically, this fits broader efforts to integrate digital assets, influenced by evolving CFTC and SEC jurisdictions.
Stakeholders offer varied views. Industry groups like the Securities Industry and Financial Markets Association may support it for promoting innovation, while regulators emphasize the need for strong enforcement, as in recent SEC actions against unregistered commodity pools.
The proposal establishes a framework for efficient listing of commodity-based trust shares, emphasizing transparency and surveillance. Potential next steps include SEC review and possible approval within 45 to 90 days, with public comments shaping outcomes. Ongoing debates may focus on adapting to emerging assets like cryptocurrencies, balancing market growth with investor safeguards. Challenges include ensuring surveillance keeps pace with global commodity markets, while trajectories could involve further harmonization across U.S. exchanges.
