SEC Eyes NYSE Arca’s 85% Rule That Could Reshape Bitcoin and XRP ETF Market

The Securities and Exchange Commission opened a review on April 27 for an NYSE Arca proposal that could change how Bitcoin and XRP funds get listed. The plan sets an 85% asset threshold for crypto trust products.

Pretty much every sponsor watching this space knows the stakes. NYSE Arca filed 85 items for the SEC to consider, and the core piece is simple: trusts need to hold at least 85% of their net asset value in assets the exchange already approved. Bitcoin, Ether, Solana, and XRP all make the cut because their futures contracts traded on designated markets for at least six months. The remaining 15% can be non-qualifying stuff, but sponsors have to watch that line every single day.

Daily Monitoring and Compliance Pressure

Trust sponsors won’t get much breathing room here. They need to monitor their holdings daily and report immediately if they dip below that 85% mark. One bad day of rebalancing could trigger a compliance issue, and the SEC wants that transparency built into the system from the start.

Non-fungible assets and collectibles didn’t make it into the commodity definition under this rule. That’s a clear signal from NYSE Arca about what kind of products it wants on its platform. The focus stays on established crypto assets with futures trading history, not experimental digital collectibles or one-off NFT projects.

The public comment period runs somewhere between 21 and 45 days from the April 27 notice. After that, the SEC can approve the proposal, reject it outright, or extend proceedings for more review. There’s no clear timeline yet for when a final decision lands.

And this didn’t come out of nowhere. The SEC rolled out generic listing standards for crypto ETPs back in 2025, cutting review times from 240 days down to around 75. That was a big shift. But procedural delays still happen—GraniteShares ran into exactly that problem trying to launch its XRP ETF, and the wait continues.

Derivatives Add Another Layer

The proposal gets tricky when it comes to derivatives. NYSE Arca wants them counted by aggregate gross notional value, which could disqualify some borderline products. Say a trust holds mostly Bitcoin but has significant exposure to over-the-counter call options on a Bitcoin ETF. The filing’s examples show that setup might not hit the 85% qualifying threshold, basically blocking it from listing under this framework.

Market surveillance is the big reason NYSE Arca pushed this rule. The exchange thinks the 85% threshold will help catch manipulation attempts and keep sponsors honest about what they’re holding. By forcing daily compliance checks, the framework tries to prevent trusts from drifting into riskier territory without anyone noticing.

Read also: SEC Opens Door for XRP in Multi-Asset Crypto Trusts With 85/15 Rule

The SEC’s decision here could reshape how new crypto products enter the market. Sponsors will need to structure their funds differently if this rule passes, probably sticking closer to vanilla Bitcoin or Ether holdings instead of mixing in exotic derivatives or smaller-cap tokens. That’s a safer bet for compliance but maybe less interesting for investors looking for diversified crypto exposure.

What This Means for Future Products

The outcome matters for everyone building crypto ETFs right now. If the SEC approves the 85% rule, expect sponsors to play it safe with their asset mixes. Bitcoin and Ether will probably dominate new filings even more than they already do. XRP and Solana have the futures trading history to qualify, so they’re in decent shape, but anything newer or more experimental faces a tougher path.

The comment period gives industry players a chance to weigh in. Exchanges, asset managers, and crypto firms will probably submit feedback about whether the 85% threshold is too strict or just right. Some might argue it limits innovation, while others will say it’s necessary for investor protection.

NYSE Arca designed this framework to balance two goals: let new products launch without endless delays, but keep market integrity tight enough to satisfy regulators. The daily monitoring requirement shows how seriously the exchange takes compliance. Sponsors can’t just file paperwork and forget about it—they’ll need systems in place to track their holdings constantly and flag problems fast.

The exclusion of NFTs and collectibles narrows the field pretty significantly. Some sponsors probably hoped to launch funds with broader digital asset exposure, but this rule keeps the focus on cryptocurrencies with established futures markets. That’s a more conservative approach, but it fits with how the SEC has handled crypto products so far.

Read also: Kbank Tests Ripples XRP Rails for Cross-Border Payments in Seoul Pilot

The SEC’s mid-2025 generic listing standards already sped things up, but procedural issues still pop up. GraniteShares’ XRP ETF delay shows the process isn’t totally smooth yet. The 85% rule could add another checkpoint for sponsors to clear, though NYSE Arca probably sees it as a way to reduce back-and-forth with regulators once products meet the initial threshold.

Derivatives counting by gross notional value could trip up some creative fund structures. A trust that looks compliant on paper might fail the test once you add up all the derivative exposure. The filing’s examples make it clear that over-the-counter options and similar instruments could push a fund below 85% qualifying assets, even if the sponsor thought they had room to spare.

The review period started April 27, and the clock is ticking on public comments. Between 21 and 45 days isn’t much time for the industry to organize detailed feedback, but the SEC rarely extends these windows without good reason. Sponsors waiting to launch products will watch closely for any hints about which way the decision might go.

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