SEC gives Bitcoin-heavy trusts a new 15% window to venture beyond existing listing rules

The US Securities and Exchange Commission has approved a Nasdaq Texas rule that gives qualifying commodity-linked trusts more flexibility over what they can hold while allowing actively managed strategies.

Under the Sept. 3 approval order, a qualifying Commodity-Based Trust Share must keep at least 85% of its net asset value in cash, cash equivalents, or commodities, commodity-based assets, and securities that meet the rule's eligibility tests. The remaining 15% can include specified digital commodities or securities that do not meet those tests.

In practice, that means a trust can put up to 15% into otherwise ineligible assets without losing access to the exchange's streamlined listing process. For a Bitcoin-heavy trust, for example, that could provide room for other digital assets or certain derivatives. It does not allow a sponsor to put any asset it wants into the 15% portion, and it does not approve a particular fund.

The 15% limit applies to all otherwise ineligible holdings combined. Derivatives can also use up that allowance quickly because the rule counts their total underlying exposure, known as gross notional value, rather than just an option's price or the cash initially committed.