Notice2025-14234
Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing of Proposed Rule Change To Amend the Hashdex Nasdaq Crypto Index US ETF To Allow for In-Kind Transfers 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
July 29, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 143 (Tuesday, July 29, 2025)</title>
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[Federal Register Volume 90, Number 143 (Tuesday, July 29, 2025)]
[Notices]
[Pages 35746-35747]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-14234]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103539; File No. SR-NASDAQ-2025-052]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing of Proposed Rule Change To Amend the Hashdex Nasdaq
Crypto Index US ETF To Allow for In-Kind Transfers Under Nasdaq Rule
5711(d) (Commodity-Based Trust Shares)
July 24, 2025.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\, and Rule 19b-4 thereunder,\2\ notice is hereby given
that on July 11, 2025, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I and II below, which Items have been prepared by the Exchange.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the Hashdex Nasdaq Crypto Index US
ETF (the ``Trust''), shares (``Shares'') of which have been approved by
the Commission to list and trade on the Exchange pursuant to Nasdaq
Rule 5711(d), to allow for ``in-kind'' transfers of the Trust's bitcoin
and ether.
The text of the proposed rule change is available on the Exchange's
website at <a href="https://listingcenter.nasdaq.com/rulebook/nasdaq/rulefilings">https://listingcenter.nasdaq.com/rulebook/nasdaq/rulefilings</a>
and the principal office of the Exchange.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Commission approved the listing and trading of the Shares of
the Trust under Nasdaq Rule 5711(d) \3\ on December 19, 2024.\4\ The
Trust is managed and controlled by Hashdex Asset Management Ltd.
(``Sponsor'') and administered by U.S. Bancorp Fund Services, LLC (the
``Administrator''). U.S. Bancorp Fund Services, LLC is the transfer
agent for the Trust (``Transfer Agent''). U.S. Bank, N.A. holds the
Trust's cash and/or cash equivalents \5\ (``Cash Custodian''). Coinbase
Custody Trust Company, LLC and BitGo Trust Company, Inc. are the
custodians of the Trust's digital assets (``Crypto Custodians'', and
together with the Cash Custodian, the ``Custodians'').
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\3\ Nasdaq Rule 5711(d) governs the listing and trading of
Commodity-Based Trust Shares, which means a security (1) that is
issued by a trust that holds (a) a specified commodity deposited
with the trust, or (b) a specified commodity and, in addition to
such specified commodity, cash; (2) that is issued by such trust in
a specified aggregate minimum number in return for a deposit of a
quantity of the underlying commodity and/or cash; and (3) that, when
aggregated in the same specified minimum number, may be redeemed at
a holder's request by such trust which will deliver to the redeeming
holder the quantity of the underlying commodity and/or cash. See
Nasdaq Rule 5711(d)(iv)(A).
\4\ See Securities Exchange Act Release No. 101998 (December 19,
2024), 89 FR 106707 (December 30, 2024) (SR-NASDAQ-2024-028; SR-
CboeBZX-2024-091). See also Securities Exchange Act Release Nos.
101218 (Sept. 30, 2024), 89 FR 80970 (Oct. 4, 2024) (SR-NASDAQ-2024-
028) (``Amendment No. 1''); and 102309 (January 29, 2025), 90 FR
8961 (February 4, 2025) (SR-NASDAQ-2025-006). SR-NASDAQ-2025-006
updated certain representations made in Amendment No. 1 relating to
the service providers and the basket size of the Hashdex Nasdaq
Crypto Index US ETF. Amendment No. 1, as amended by SR-NASDAQ-2025-
006, will hereinafter be referred to as the ``Hashdex Original
Filing.''
\5\ ``Cash equivalents'' are limited to short-term treasury
bills (90 days or less to maturity), money market funds, and demand
deposit accounts.
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In the Hashdex Original Filing, the Exchange represented that the
Trust would only allow for cash creations and redemptions.\6\ The
Exchange now proposes to amend the Hashdex Original Filing to allow for
in-kind transfers of the Trust's bitcoin and ether. The proposed in-
kind transfer process will be an alternative to the Trust's current
cash creation and redemption process. Except for the changes described
below, all other representations in the Hashdex Original Filing remain
unchanged and will continue to constitute continued listing
requirements. In addition, the Trust will continue to comply with the
terms of the Hashdex Original Filing and the requirements in Rule
5711(d).
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\6\ See Hashdex Original Filing, at 80973--80974.
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Specifically, as noted in the Hashdex Original Filing, the Sponsor
executed an agreement so that Coinbase Inc. could serve as the Trust's
``Prime Execution Agent.'' In this capacity, the Prime Execution Agent
will facilitate the transfer of bitcoin and ether between the Trust and
an Authorized Participant,\7\ its designated agent or client as part of
in-kind creations and redemptions.\8\
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\7\ ``Authorized Participants'' are registered broker-dealers
that are Depositary Trust Company (``DTC'') participants that enter
into an authorized participant agreement with the Sponsor.
\8\ In certain instances, an Authorized Participant may request
the creation or redemption of shares on an agency basis on behalf of
its client, in which case the client will deliver or receive the
required bitcoin and ether directly to or from the Trust via the
Prime Execution Agent. Similarly, when acting on a principal basis,
an Authorized Participant may designate an agent to manage the
transfer of bitcoin and ether to or from the Trust in connection
with creation or redemption requests.
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Further, as noted in the Hashdex Original Filing, the Trust issues
and redeems ``Baskets'' \9\ on a continuous basis. In relation to in-
kind creations and redemptions, Baskets will be issued or redeemed in
exchange for bitcoin and ether, and no Shares will be issued unless the
Trust confirms receipt of the corresponding amount of bitcoin and
ether.
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\9\ Baskets will be offered continuously at NAV per Share for
10,000 Shares.
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In connection with Share creations and redemptions, Authorized
Participants would deliver either cash or, in the case of in-kind
transactions, bitcoin and ether to the Trust, and would receive either
cash or bitcoin and ether, as applicable.
For the creation of a Basket, the Authorized Participant is
required to submit the order by 2:00 p.m. ET, or the close of regular
trading on the Exchange, whichever is earlier (the ``Order Cutoff
Time'').
Specifically, in connection with in-kind creations and redemptions,
the Authorized Participants will submit orders to create Baskets in
exchange for bitcoin and ether. On settlement date for an in-kind
creation, the Trust delivers Shares to the Authorized Participant in
exchange for bitcoin and ether received from the Authorized
Participant, or its designated agent or client. The Authorized
Participant (or its designated agent or client) will deposit such
bitcoin and ether into the Trust's account.
In the event the Authorized Participant, or its designated agent or
client, has not deposited the bitcoin and ether to the Trust's account
by the applicable time on the settlement date of the in-kind creation
order, the
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Authorized Participant may elect to (1) cancel the in-kind creation
order, (2) delay settlement of the order to enable delivery of the
bitcoin and ether at a later date, or (3) accept that the Trust will
execute a transaction required for the creation and the Authorized
Participant will deliver the U.S. dollars required for this purchase.
In the case of (3), the Authorized Participant is responsible for the
dollar cost of the difference between the Creation NAV Price \10\ and
the Creation Execution Price \11\ if the Creation Execution Price is
higher. In case the Creation Execution Price is lower than the Creation
NAV Price, the Authorized Participant shall get to keep the dollar
impact of any such difference.
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\10\ ``Creation NAV Price'' will mean the bitcoin and ether
price utilized in calculating the NAV per Share on the date of the
Order Cutoff Time for a creation order (``Creation Order Date'').
\11\ ``Creation Execution Price'' will mean the price at which
the Trust acquires the bitcoin and ether.
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In the event the Authorized Participant has not deposited the
Shares to the Trust, by the applicable time on the settlement date of
the in-kind redemption order, the Authorized Participant may elect to
(1) cancel the in-kind creation order, (2) delay settlement of the
order to enable delivery of the Shares at a later date, or (3) accept
that the Trust will cancel the in-kind creation order.
On the settlement date for an in-kind redemption, the Trust
transfers bitcoin and ether to the Authorized Participant (or its
designated agent or client) against receipt of the corresponding
Shares.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\12\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\13\ in particular, in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest.
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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that permitting in-kind transfers with
respect to the Trust's creation and redemption process promotes just
and equitable principles of trade and helps remove impediments to and
perfect the mechanism of a free and open market and a national market
system. As discussed above, the proposed changes would permit the Trust
to utilize an in-kind creation and redemption process in addition to
the cash creation and redemption process. This added ability would make
the Trust (and the market more generally) operate more efficiently
because Authorized Participants, their designated agents or clients,
would be able to source bitcoin and ether rather than to provide cash
to the Trust and/or receive bitcoin and ether from the Trust. This
means that the Authorized Participant, its designated agent or client,
would be responsible for buying and selling the bitcoin and ether
rather than the Trust itself, which would potentially lessen the impact
on the market of the Trust on both sides of the transaction by allowing
the Authorized Participant to decide how and where to source the
underlying bitcoin and ether for creations and deciding how, where, and
whether to sell the underlying bitcoin and ether for redemptions. This
could lead to improvements in the creation and redemption process for
both Authorized Participants and the Trust, and could potentially
increase efficiency, and ultimately benefit the end investors in the
Trust.
Except for the changes described above, all other representations
in the Hashdex Original Filing remain unchanged and will continue to
constitute continued listing requirements. In addition, the Trust will
continue to comply with the terms of the Hashdex Original Filing and
the requirements in Rule 5711(d).
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. As discussed above, the
proposed amendments are intended to reflect changes to the Trust's
creation and redemption process, specifically to allow for in-kind
transfers. The Exchange believes that the proposed rule change would
increase operational efficiencies for the Trust (and the market more
generally). The Exchange believes these changes will not impose any
burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission shall: (a) by order approve
or disapprove such proposed rule change, or (b) institute proceedings
to determine whether the proposed rule change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. 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#cdbfb8a1a8e0aea2a0a0a8a3b9be8dbea8aee3aaa2bb"><span class="__cf_email__" data-cfemail="a8daddc4cd85cbc7c5c5cdc6dcdbe8dbcdcb86cfc7de">[email protected]</span></a>. Please include
file number SR-NASDAQ-2025-052 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-2025-052. 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 filing 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-2025-052 and should be submitted
on or before August 19, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-14234 Filed 7-28-25; 8:45 am]
BILLING CODE 8011-01-P
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