CTF Written Submission

Structure for Yield-Stripped Derivative Securities in CERES SNAP Distribution

Oct. 8, 2025
  • The yield-stripped derivative securities (SNAP Yield-Stripped Shares) are structured as a separate class of shares in a registered money market fund (MMF), qualifying as securities under the Investment Company Act of 1940 and explicitly excluded from the payment stablecoin definition under the GENIUS Act.
  • The structure leverages SEC Rule 18f-3 for multi-class funds and Rule 18f-4 for derivatives, ensuring compliance by allocating income via class-specific fees that absorb yield, maintaining $1 NAV stability and avoiding classification as a payment stablecoin or triggering OCC/PPSI requirements.
  • Implementation requires amending MMF registration, SEC filings, and board-approved allocation methods, with ongoing legal review and potential SEC no-action relief to justify class-specific fees as bona fide for services such as blockchain administration and fraud detection.

Last Reviewed or Updated: Nov. 13, 2025