Cboe Seeks Simpler Rules for Listing Gold and Oil Trust Shares
Published Date: 8/4/2025
Notice
Summary
Cboe BZX Exchange wants to make it easier to list and trade shares tied to commodities like gold or oil by updating their rules. This change affects investors and traders who deal with these commodity-based trust shares, allowing more options on the exchange. The proposal was filed on July 30, 2025, and could open new doors for trading without extra delays or costs.
Analyzed Economic Effects
9 provisions identified: 6 benefits, 2 costs, 1 mixed.
Easier Generic Listing for Commodity ETPs
On July 30, 2025 Cboe BZX filed a proposal to amend Rule 14.11(e)(4) so Commodity-Based Trust Shares that meet the proposed standards can be listed and traded generically (including via Form 19b-4(e)) instead of requiring a separate Section 19(b) filing for each series. This change would let the Exchange approve and start trading qualifying commodity trust shares more quickly when they meet the rule's criteria.
Liquidity Policies for Illiquid Trusts
If a Trust has on a daily basis less than 85% of its assets readily available to meet redemptions, it must have written liquidity risk policies and procedures reviewed at least annually. The rule requires the policies to address investment strategy liquidity, cash and funding sources, and the percentage/description of assets that are restricted or encumbered.
Detailed Daily Website Disclosure Required
Each Trust must publicly disclose on a free website before market open the Trust's holdings (ticker, identifier, description, quantity, and percentage weighting), prior-business-day Net Asset Value per share, Market Price, Premium or Discount, the Trust's prior-day trading volume, median-ask spread (calculated from 10-second intervals over the last 30 calendar days), a table and line graph of premiums/discounts, liquidity policies, NAV methodology, and an effective prospectus for download.
Clear Delisting Triggers for Small Series
After the initial 12-month period following commencement of trading, the Exchange may consider suspension or delisting if: (a) the Trust has more than 60 days until termination but fewer than 50 record and/or beneficial holders for 30 or more consecutive trading days; (b) the Trust has fewer than 50,000 shares issued and outstanding; or (c) the market value of all shares issued and outstanding is less than $1,000,000.
Trading Halt Rules When Pricing Missing
The Exchange may halt trading during the day (and will halt no later than the next trading day if the interruption persists) when: (a) the reference asset or index value is not made widely available on at least a 15-second delayed basis from an unaffiliated source; (b) the Intraday Indicative Value is not made widely available on at least a 15-second basis during Regular Trading Hours; or (c) required Trust disclosures are not being made. If NAV is not available to all participants at the same time, trading will be halted until it is.
No Generic Leveraged or Inverse ETPs
The proposed rule generally bans leveraged or inverse series of Commodity-Based Trust Shares from being listed generically on the Exchange. That means Trusts that seek to provide returns that are a multiple or an inverse multiple of a reference value cannot use the generic listing path under proposed Rule 14.11(e)(4)(F).
Market Maker Account Reporting and Records
Registered Market Makers in Commodity-Based Trust Shares must file and keep current lists of all accounts used for trading each underlying commodity and Commodity-Based Asset, and must make available books, records or other information about trading in underlying physical commodities or related derivatives when requested by the Exchange.
Firewall Rules for Index and Affiliated Entities
If an index is maintained by a broker-dealer, the broker-dealer must erect and maintain a firewall around personnel responsible for index maintenance. If a Trust is affiliated with an entity that can influence a commodity's price or supply, the Trust must implement firewalls, written policies to prevent misuse of material non-public information, and policies to prevent fraudulent or manipulative acts.
Creation/Redemption Minimums and Options
Proposed Rule 14.11(e)(4)(C)(i)(d)-(e) requires that Trust shares be issued in a specified aggregate minimum number in return for (1) a specified quantity of underlying commodities, Commodity-Based Assets, securities, cash and Cash Equivalents, or (2) cash valued at the next determined Net Asset Value per share; and, when aggregated in the same minimum number, may be redeemed for the specified quantity or cash valued at next NAV per share.
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