Grayscale Ethereum ETFs Move to SEC’s Generic Listing Framework
Grayscale’s top Ethereum investment offerings are now operating under a more streamlined regulatory regimen. The shift to generic standards reduces future filing obligations, representing a crucial advancement in the evolution of crypto ETFs within U.S. markets.
Summary
- The SEC has approved NYSE Arca’s application to switch Grayscale’s Ethereum ETFs from non-generic to generic listing standards.
- This regulatory change simplifies oversight, decreasing future filing requirements and permitting funds to trade without separate SEC approvals.
- Analysts believe this modification is a step toward broader acceptance of spot crypto ETFs, as the SEC continues seeking public input.
A notice from the U.S. Securities and Exchange Commission on Sept. 23 confirmed that the agency has authorized NYSE Arca’s request to transition the Grayscale Ethereum Trust ETF and its Mini Trust counterpart from “non-generic” to “generic” listing standards.
This regulatory update, submitted by the exchange on Sept. 19 and effective immediately, moves these products from a specialized regulatory framework to a more general classification akin to traditional commodity-based trusts. This alteration allows the funds to trade without needing case-by-case SEC approval.
Significance of the Rule Change
Last week, NYSE Arca asserted that this transition aligns with the Exchange Act, citing Section 6(b)(5), which mandates that exchange rules should prevent fraud and manipulation while fostering fair trading and protecting investors.
The exchange argued that the generic standard “will eliminate barriers and enhance the function of a free and open market.” In essence, NYSE Arca believes that by removing unnecessary individual oversight for approved products, market efficiency will boost, resulting in greater benefits for investors through enhanced competition and operational fluidity.
The SEC agreed with this assessment, waiving the customary 30-day operational delay to permit the rule change to take effect immediately. Specifically, the agency indicated that this action aligns with investor protection and public interest, as it did not raise any new issues.
Nonetheless, the SEC retained a safeguard. The agency’s announcement specified that it holds the authority to “temporarily suspend such rule change” for the next 60 days if deemed necessary to safeguard investors, protect markets, or further the objectives of the Act.
ETF specialists view this development as part of a broader trend. Bloomberg Intelligence analyst James Seyffart noted last week that these new standards could pave the way for a range of spot crypto exchange-traded products, especially altcoin ETFs awaiting clearer regulatory guidance.
The SEC has welcomed public feedback regarding this rule change, highlighting that the consultation process is ongoing. Stakeholders can submit information, opinions, and arguments concerning the alignment of the change with the Exchange Act.