The 3’ exonuclease TOE1 selectively processes snRNAs through recognition of Sm complex assembly and 5’ cap trimethylation

Competing exonucleases that promote 3’ end maturation or degradation direct quality control of small non-coding RNAs, but how these enzymes distinguish normal from aberrant RNAs is poorly understood. The Pontocerebellar Hypoplasia 7 (PCH7)-associated 3’ exonuclease TOE1 promotes maturation of canonical small nuclear RNAs (snRNAs). Here, we demonstrate that TOE1 achieves specificity towards canonical snRNAs by recognizing Sm complex assembly and cap trimethylation, two features that distinguish snRNAs undergoing correct biogenesis from other small non-coding RNAs. Indeed, disruption of Sm complex assembly via snRNA mutations or protein depletions obstructs snRNA processing by TOE1, and in vitro snRNA processing by TOE1 is stimulated by a trimethylated cap. An unstable snRNA variant that normally fails to undergo maturation becomes fully processed by TOE1 when its degenerate Sm binding motif is converted into a canonical one. Our findings uncover the molecular basis for how TOE1 distinguishes snRNAs from other small non-coding RNAs and explain how TOE1 promotes maturation specifically of canonical snRNAs undergoing proper processing.