SEC Ponders Crypto Funds Invading Stock Exchange Turf
Published Date: 2/6/2025
Notice
Summary
The SEC is deciding whether to approve a new NYSE Arca rule that would let people buy and sell shares tied to commodities and digital assets, including the Grayscale Digital Large Cap Fund. This change affects investors interested in these new types of funds and could open up fresh trading opportunities soon. The SEC is taking its time to carefully review before giving the green light or not.
Analyzed Economic Effects
3 provisions identified: 3 benefits, 0 costs, 0 mixed.
Exchange May List Commodity & Digital Funds
The SEC is reviewing a NYSE Arca proposal (filed October 15, 2024; proceedings instituted January 31, 2025) to adopt a new rule that would allow listing and trading of “Commodity- and/or Digital Asset-Based Investment Interests.” If approved, investors could buy and sell exchange-listed shares tied to commodities or digital assets on NYSE Arca.
Listing Rule Requires 90% Surveillance-Linked Assets
The proposed NYSE Arca rule would require that, in the aggregate, at least 90% of the weight of a fund's commodity and/or digital asset holdings be, both initially and on an ongoing basis, assets for which the Exchange can obtain information via the Intermarket Surveillance Group (ISG) or via a comprehensive surveillance sharing agreement.
Grayscale Fund: Asset Mix, NAV, and Basket Rules
The proposal would list shares of the Grayscale Digital Large Cap Fund LLC, whose Fund Components (as of the filing) were bitcoin 75.46%, ether 17.90%, Solana 4.13%, XRP 1.86%, and Avalanche 0.65%. The manager will publish the fund's NAV at 4:00 p.m. New York time each business day, and the fund issues and redeems Shares only in Baskets of 10,000 Shares with authorized participants creating and redeeming using cash only.
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