2025-18038NoticeWallet

Cboe Updates Rules to List More Commodity Trusts Easily

Published Date: 9/18/2025

Notice

Summary

Cboe BZX Exchange wants to make it easier to list and trade Commodity-Based Trust Shares by updating their rules. This change affects investors and traders by allowing more types of these shares to be bought and sold on the exchange. The SEC is reviewing the latest update, and if approved, it could open new trading opportunities soon without extra costs.

Analyzed Economic Effects

7 provisions identified: 6 benefits, 0 costs, 1 mixed.

Generic Listing of Commodity ETPs

The Exchange proposes to allow generic listing and trading of Commodity-Based Trust Shares that meet the standards in proposed Rule 14.11(e)(4), so products meeting those criteria can be approved for listing or trading without a separate Section 19(b) filing. The Exchange filed the proposal July 30, 2025 and Amendment No. 3 on September 4, 2025; the notice was published September 18, 2025.

Detailed Free Website Disclosures

Trusts must publicly disclose on a free website before the opening of regular trading: ticker, identifier, description, quantity and percentage weighting of holdings; the Trust's current Net Asset Value per share, Market Price, and Premium or Discount as of the end of the prior business day; trading days at premium/discount for the most recently completed calendar year and subsequent quarters; a line graph of premiums/discounts for those periods; the Trust's median-ask spread (computed from national best bid/offer every 10 seconds over the last 30 calendar days); liquidity risk policies; NAV methodology; previous day's trading volume; and a downloadable effective prospectus.

Liquidity Rules: 85% Readily Available

If a Trust has on a daily basis less than 85% of its assets readily available to meet redemption requests, it must adopt written liquidity risk policies and procedures designed to address inability to meet redemptions without significant dilution; these policies must be reviewed no less frequently than annually. An asset is not readily available if it cannot be liquidated within one business day; the rule explicitly cites examples such as crypto assets subject to protocol staking and notes that staking more than 15% of assets would trigger the liquidity rule requirements.

New Delisting and Trading Halt Thresholds

The Exchange would consider suspending trading or initiating delisting after an initial 12-month period if—for example—the Trust has fewer than 50 record or beneficial holders for 30 or more consecutive trading days (while having more than 60 days until termination), has fewer than 50,000 shares outstanding, or the market value of all issued and outstanding shares is less than $1,000,000. Trading may also be halted or delisted if dissemination of underlying reference asset value or the Intraday Indicative Value is interrupted past the trading day it occurred or is no longer made widely available on at least a 15-second delayed basis, or if the Net Asset Value is not calculated at least once daily or made widely available.

Three Paths for Listing Eligibility

To be eligible for generic listing, a commodity underlying a Commodity-Based Asset must meet at least one of three criteria on an initial (and mostly continuing) basis: (a) trade on a market that is an Intermarket Surveillance Group (ISG) member with access to trading information through the ISG member; (b) underlie a futures contract that has traded on a Designated Contract Market for at least six months with a comprehensive surveillance sharing agreement; or (c) be represented by an Exchange-Traded Fund that provides economic exposure of no less than 40% of its Net Asset Value to the relevant commodity and trades on a national securities exchange (the ETF criterion is applicable on an initial listing basis).

No Generic Leveraged/Inverse Listings

The Exchange would generally prohibit a leveraged or inverse series of Commodity-Based Trust Shares from being listed generically; specifically, a Trust may not seek to provide returns that correspond to a multiple or inverse multiple of an index, benchmark, or reference value over a predetermined period of time under the proposed generic listing standards.

Firewalls for Index and Sponsor Conflicts

If an index is maintained by a broker-dealer, personnel who maintain the index or have access to index-change information must be behind a firewall. Advisory committees or boards advising an index licensor must have procedures to prevent use or dissemination of material non-public information. If a Trust is affiliated with an entity that can influence the price or supply of a commodity held by the Trust, the Trust must implement a firewall, written policies to prevent misuse of material non-public information, and policies to prevent fraudulent or manipulative acts.

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Key Dates

Effective Date
Published Date
9/15/2025
9/18/2025

Department and Agencies

Department
Independent Agency
Agency
Securities and Exchange Commission
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