SEC Loosens Listing Rules for Bitcoin-Heavy Trusts with 15% Window

The US Securities and Exchange Commission (SEC) has approved a rule change for Nasdaq Texas that gives qualifying commodity-linked trusts more flexibility over what they can hold in their portfolios. The new rule, which took effect on September 3, allows these trusts to keep at least 85% of their net asset value in cash, cash equivalents, or commodities and securities that meet certain tests. The remaining 15% can include specified digital commodities or securities that do not meet those tests.

The rule change is significant for Bitcoin-heavy trusts because it provides them with a new window to venture beyond existing listing rules. For example, a trust could put up to 15% of its portfolio into otherwise ineligible assets such as other digital assets or certain derivatives without losing access to the exchange's streamlined listing process.

However, the rule is not without constraints. The SEC has illustrated the limit with an example of a trust holding $100 million of Bitcoin and 5,000 over-the-counter call options on a Bitcoin exchange-traded fund (ETF). In this scenario, the total exposure under the rule would be $140 million, but only the $100 million in Bitcoin qualifies toward the 85% requirement. This means that even a Bitcoin-heavy portfolio can fail to meet the test if its options position becomes too large.

The SEC also emphasized that sponsors must check compliance with the 85% threshold each day and promptly notify Nasdaq Texas after a breach. The exchange filing also limits which commodities can occupy the nonqualifying portion, requiring them to be digital commodities under the rule's definition.