Notice2025-11094
Self-Regulatory Organizations; Nasdaq Stock Market LLC; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change To List and Trade Shares of the Grayscale Hedera Trust (HBAR) Under Nasdaq Rule 5711(d) (Commodity Based Trust Shares)
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
June 17, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 115 (Tuesday, June 17, 2025)</title>
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[Federal Register Volume 90, Number 115 (Tuesday, June 17, 2025)]
[Notices]
[Pages 25705-25707]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-11094]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103238; File No. SR-NASDAQ-2025-021]
Self-Regulatory Organizations; Nasdaq Stock Market LLC; Order
Instituting Proceedings To Determine Whether To Approve or Disapprove a
Proposed Rule Change To List and Trade Shares of the Grayscale Hedera
Trust (HBAR) Under Nasdaq Rule 5711(d) (Commodity Based Trust Shares)
June 12, 2025.
I. Introduction
On February 28, 2025, The Nasdaq Stock Market LLC (``Exchange'')
filed with the Securities and Exchange Commission (``Commission''),
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to
list and trade shares (``Shares'') of the Grayscale Hedera Trust (HBAR)
(``Trust'') under Nasdaq Rule 5711(d) (Commodity-Based Trust Shares).
The proposed rule change was published for comment in the Federal
Register on March 17, 2025.\3\
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 102569 (Mar. 11,
2025), 90 FR 12395 (``Notice''). Comments received on the proposed
rule change are available at: <a href="https://www.sec.gov/comments/sr-nasdaq-2025-021/srnasdaq2025021.htm">https://www.sec.gov/comments/sr-nasdaq-2025-021/srnasdaq2025021.htm</a>.
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On April 29, 2025, pursuant to Section 19(b)(2) of the Act,\4\ the
Commission designated a longer period within which to approve the
proposed rule change, disapprove the proposed rule change, or institute
proceedings to determine whether to disapprove the proposed rule
change.\5\ This order
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institutes proceedings under Section 19(b)(2)(B) of the Act \6\ to
determine whether to approve or disapprove the proposed rule change.
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\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 102943, 90 FR 19037
(May 5, 2025). The Commission designated June 15, 2025, as the date
by which the Commission shall approve or disapprove, or institute
proceedings to determine whether to disapprove, the proposed rule
change.
\6\ 15 U.S.C. 78s(b)(2)(B).
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II. Summary of the Proposal
As described in more detail in the Notice,\7\ the Exchange proposes
to list and trade the Shares of the Trust under Nasdaq Rule 5711(d),
which governs the listing and trading of Commodity-Based Trust Shares
on the Exchange.
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\7\ See Notice, supra note 3.
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According to the Exchange, the investment objective of the Trust is
for the value of the Shares to reflect the value of the native token of
the Hedera Network (``HBAR'') \8\ held by the Trust, determined by
reference to the ``Index Price,'' less the Trust's expenses and other
liabilities.\9\ The ``Index Price'' is the U.S. dollar value of HBAR
derived from the ``Digital Asset Trading Platforms'' \10\ that are
reflected in the CoinDesk HBAR CCIXber Reference Rate (``Index''),
calculated at 4:00 p.m., New York time, on each business day.\11\ The
Trust's assets consist solely of HBAR.\12\ The Trust will create and
redeem Shares in cash with authorized participants on an ongoing basis
in one or more blocks of 10,000 Shares.\13\
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\8\ The Exchange states that the Hedera Network is a public
distributed ledger technology network built on a hashgraph
distributed consensus algorithm. See Notice at 12396.
\9\ See id. Grayscale Operating, LLC and Grayscale Investments
Sponsors, LLC are the sponsors of the Trust and are indirect wholly
owned subsidiaries of Digital Currency Group, Inc. The Exchange
states that as of May 3, 2025, Grayscale Operating, LLC will cease
to act as sponsor of the Trust and Grayscale Investment Sponsors,
LLC will be sole sponsor of the Trust. CSC Delaware Trust Company is
the trustee of the Trust and Coinbase Custody Trust Company, LLC is
the custodian for the Trust's HBAR. See id. at 12395.
\10\ According to the Exchange, a ``Digital Asset Trading
Platform'' is an electronic marketplace where trading participants
may trade, buy and sell HBAR based on bid-ask trading. See id. at
12396 n.8.
\11\ See id. at 12395 n.5. The index provider for the Trust is
CoinDesk Indices, Inc. See id. at 12395.
\12\ See id.
\13\ See id. at 12401-02.
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III. Proceedings To Determine Whether To Approve or Disapprove SR-
NASDAQ-2025-021 and Grounds for Disapproval Under Consideration
The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Act \14\ to determine whether the proposed rule
change should be approved or disapproved. Institution of proceedings is
appropriate at this time in view of the legal and policy issues raised
by the proposed rule change. Institution of proceedings does not
indicate that the Commission has reached any conclusions with respect
to any of the issues involved. Rather, the Commission seeks and
encourages interested persons to provide comments on the proposed rule
change.
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\14\ 15 U.S.C. 78s(b)(2)(B).
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Pursuant to Section 19(b)(2)(B) of the Act,\15\ the Commission is
providing notice of the grounds for disapproval under consideration.
The Commission is instituting proceedings to allow for additional
analysis of the proposed rule change's consistency with Section 6(b)(5)
of the Act, which requires, among other things, that the rules of a
national securities exchange be ``designed to prevent fraudulent and
manipulative acts and practices'' and ``to protect investors and the
public interest.'' \16\
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\15\ Id.
\16\ 15 U.S.C. 78f(b)(5).
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The Commission asks that commenters address the sufficiency of the
Exchange's statements in support of the proposal, which are set forth
in the Notice, in addition to any other comments they may wish to
submit about the proposed rule change. In particular, the Commission
seeks comment on whether the proposal to list and trade Shares of the
Trust, which would hold HBAR, is designed to prevent fraudulent and
manipulative acts and practices or raises any new or novel concerns not
previously contemplated by the Commission.
IV. Procedure: Request for Written Comments
The Commission requests that interested persons provide written
submissions of their views, data, and arguments with respect to the
issues identified above, as well as any other concerns they may have
with the proposal. In particular, the Commission invites the written
views of interested persons concerning whether the proposal is
consistent with Section 6(b)(5) or any other provision of the Act, and
the rules and regulations thereunder. Although there do not appear to
be any issues relevant to approval or disapproval that would be
facilitated by an oral presentation of views, data, and arguments, the
Commission will consider, pursuant to Rule 19b-4, any request for an
opportunity to make an oral presentation.\17\
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\17\ Section 19(b)(2) of the Act, as amended by the Securities
Acts Amendments of 1975, Public Law 94-29 (June 4, 1975), grants the
Commission flexibility to determine what type of proceeding--either
oral or notice and opportunity for written comments--is appropriate
for consideration of a particular proposal by a self-regulatory
organization. See Securities Acts Amendments of 1975, Senate Comm.
on Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st
Sess. 30 (1975).
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Interested persons are invited to submit written data, views, and
arguments regarding whether the proposed rule change should be approved
or disapproved by July 8, 2025. Any person who wishes to file a
rebuttal to any other person's submission must file that rebuttal by
July 22, 2025.
Comments may be submitted by any of the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#92e0e7fef7bff1fdfffff7fce6e1d2e1f7f1bcf5fde4"><span class="__cf_email__" data-cfemail="2d5f584148004e4240404843595e6d5e484e034a425b">[email protected]</span></a>. Please include
file number SR-NASDAQ-2025-021 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-NASDAQ-2025-021. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for website viewing and
printing in the Commission's Public Reference Room, 100 F Street NE,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-NASDAQ-2025-021 and should
be
[[Page 25707]]
submitted on or before July 8, 2025. Rebuttal comments should be
submitted by July 22, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(57).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2025-11094 Filed 6-16-25; 8:45 am]
BILLING CODE 8011-01-P
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