Notice2025-19102
Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing of Proposed Rule Change To Adopt Listing Criteria for Options on a Commodity-Based Trust That Holds Multiple Crypto Assets
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
October 1, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 188 (Wednesday, October 1, 2025)</title>
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[Federal Register Volume 90, Number 188 (Wednesday, October 1, 2025)]
[Notices]
[Pages 47456-47460]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-19102]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104107; File No. SR-ISE-2025-30]
Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing
of Proposed Rule Change To Adopt Listing Criteria for Options on a
Commodity-Based Trust That Holds Multiple Crypto Assets
September 26, 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 September 26, 2025, Nasdaq ISE, LLC (``ISE'' or ``Exchange'') filed
with the Securities and Exchange Commission (``SEC'' or ``Commission'')
the proposed rule change as described in Items I, II, and III, 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 Options 4, Section 3, Criteria for
Underlying Securities, to adopt a listing criteria for options on a
Commodity-Based Trust that holds multiple crypto assets.
The text of the proposed rule change is available on the Exchange's
website at <a href="https://listingcenter.nasdaq.com/rulebook/ise/rulefilings">https://listingcenter.nasdaq.com/rulebook/ise/rulefilings</a>,
and at 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 Exchange proposes to amend its listing rules at ISE Options 4,
Section 3, Criteria for Underlying Securities. Specifically, the
Exchange proposes to amend the criteria for listing options on
Exchange-Traded Fund Shares (``ETFs'') at Options 4, Section 3(h).
The Exchange proposes to amend Options 4, Section 3 to adopt new
listing criteria in subparagraph (h)(vii) to permit the listing and
trading of options on a Commodity-Based Trust that meet the generic
criteria of The Nasdaq Stock Market LLC (``Nasdaq'') Rule 5711(d),\3\
except that the Commodity-Based Trust holds multiple crypto assets.\4\
The Exchange proposes to amend Options 4, Section 3(h) to
[[Page 47457]]
create a new subparagraph (4) that states,
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\3\ Nasdaq Rule 5711(d) permits the listing and trading of
certain qualifying exchange-traded products that physically hold
commodities like precious metals and digital asset commodities on
the Exchange. Pursuant to Nasdaq Rule 5711(d), the term ``Commodity-
Based Trust Shares'' means a security that: (1) is issued by a
trust, limited liability company, partnership, or other similar
entity (``Trust'') that, if applicable, is operated by a registered
commodity pool operator pursuant to the Commodity Exchange Act, and
is not registered as an investment company pursuant to the
Investment Company Act of 1940, or series or class thereof; (2) is
designed to reflect the performance of one or more reference assets
or an index of reference assets, less expenses and other
liabilities; (3) in order to reflect the performance as provided in
(d)(iii)(A)(2) above, is issued by a Trust that holds (a) one or
more commodities or commodity-based assets as defined in (d)(iii)(C)
below, and (b) in addition to such commodities or commodity-based
assets, may hold securities, cash, and cash equivalents; (4) is
issued by such Trust in a specified aggregate minimum number in
return for a deposit of (a) a specified quantity of the underlying
commodities, commodity-based assets, securities, cash, and/or cash
equivalents, or (b) a cash amount with a value based on the next
determined net asset value per Trust share; and (5) 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 (a)
the specified quantity of the underlying commodities, commodity-
based assets, securities, cash, and/or cash equivalents, or (b) a
cash amount with a value based on the next determined net asset
value per Trust share.
\4\ For purposes of this rule the term ``crypto asset'' means an
asset that is generated, issued and/or transferred using a
blockchain or similar distributive ledger technology network,
including but not limited to, assets known as ``tokens,'' ``digital
assets,'' ``virtual currencies,'' and ``coins'' and that relies on
cryptographic protocols. See definition at proposed Options 4,
Section 3(h)(4).
Additionally, with respect to a Commodity-Based Trust that meets
the requirements of Options 4, Section 3(h)(vii), the following
requirements are satisfied: (A) the total global supply of each
underlying crypto asset held by the Commodity-Based Trust has an
average daily market value of at least $700 million over the last 12
months; and (B) each crypto asset held by the Commodity-Based Trust
underlies a derivatives contract that trades on a market with which
the Exchange has a comprehensive surveillance sharing agreement,
whether directly or through common membership in the Intermarket
Surveillance Group. For purposes of this rule the term ``crypto
asset'' means an asset that is generated, issued and/or transferred
using a blockchain or similar distributive ledger technology
network, including but not limited to, assets known as ``tokens,''
``digital assets,'' ``virtual currencies,'' and ``coins'' and that
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relies on cryptographic protocols.
The proposed additional criteria would require a Commodity-Based
Trust to: (1) meet the generic criteria of Nasdaq Rule 5711(d) and hold
multiple crypto assets; (2) meet the criteria and guidelines set forth
in Options 4, Section 3(a) \5\ and (b),\6\ or Options 4, Section
3(h)(1)(ii); \7\ and (3) meet the requirements in Options 4, Section
3(h)(4) prior to listing options on the Commodity-Based Trust.
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\5\ Options 4, Section 3(a) provides that a security (which
includes an ETF) on which options may be listed and traded on the
Exchange must be a security registered (with the Commission) and be
an NMS stock (as defined in Rule 600 of Regulation NMS under the
Act), and the security shall be characterized by a substantial
number of outstanding shares that are widely held and actively
traded.
\6\ Options 4, Section 3(b) provides criteria and guidelines
when evaluating potential underlying securities for the listing of
options.
\7\ Options 4, Section 3(h)(1)(ii) provides that the Exchange-
Traded Fund Shares are available for creation or redemption each
business day from or through the issuing trust, investment company,
commodity pool or other entity in cash or in kind at a price related
to net asset value, and the issuer is obligated to issue Exchange-
Traded Fund Shares in a specified aggregate number even if some or
all of the investment assets and/or cash required to be deposited
have not been received by the issuer, subject to the condition that
the person obligated to deposit the investment assets has undertaken
to deliver them as soon as possible and such undertaking is secured
by the delivery and maintenance of collateral consisting of cash or
cash equivalents satisfactory to the issuer of the Exchange-Traded
Fund Shares, all as described in the Exchange-Traded Fund Shares'
prospectus.
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As proposed, Options 4, Section 3(h)(4) requires a Commodity-Based
Trust that meets the requirements of Options 4, Section 3(h)(vii) to
also satisfy the following requirements: (A) the total global supply of
each underlying crypto asset held by the Commodity-Based Trust has an
average daily market value of at least $700 million over the last 12
months; and (B) each crypto asset held by the Commodity-Based Trust
underlies a derivatives contract that trades on a market with which the
Exchange has a comprehensive surveillance sharing agreement, whether
directly or through common membership in the Intermarket Surveillance
Group (``ISG'').
The Exchange defines a ``crypto asset'' at Options 4, Section
3(h)(4) to mean, for purposes of this rule, an asset that is generated,
issued and/or transferred using a blockchain or similar distributive
ledger technology network, including but not limited to, assets known
as ``tokens,'' ``digital assets,'' ``virtual currencies,'' and
``coins'' and that relies on cryptographic protocols.
The market value for each underlying crypto asset will be
calculated by taking the total global supply of the particular crypto
asset multiplied by the token price.\8\ Total supply of crypto assets
includes all crypto assets currently issued and does not include
unissued crypto assets.\9\
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\8\ The market supply information can be obtained from publicly
available sources such as <a href="http://coingecko.com">coingecko.com</a> or <a href="http://coinmarketcap.com">coinmarketcap.com</a>.
\9\ For example, if Bitcoin were the underlying crypto asset,
the Exchange would consider the total supply of all Bitcoin
currently issued instead of the maximum supply, which would be
currently issued as well as unminted Bitcoin. As of September 12,
2025, Bitcoin's total supply was 19,919,915 (the maximum supply was
21,000,000). See <a href="https://www.coingecko.com/en/coins/bitcoin">https://www.coingecko.com/en/coins/bitcoin</a>. The
Exchange would calculate market value by utilizing the total supply
number multiplied by the Bitcoin price on that day.
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Further, the Exchange has specified in proposed Options 4, Section
3(h)(4) that each crypto asset held by the Commodity-Based Trust must
underlie a derivatives contract that trades on a market with which the
Exchange has a comprehensive surveillance sharing agreement, whether
directly or through common membership in ISG.\10\ The Exchange will be
required to ensure that this requirement is met prior to listing
options on a Commodity-Based Trust pursuant to proposed Options 4,
Section 3(h)(vii).
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\10\ For a list of the current members and affiliate members of
ISG, see <a href="https://isgportal.org/public-members">https://isgportal.org/public-members</a>.
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As a result of this amendment, the proposed listing criteria would
permit a Commodity-Based Trust that is generically listed on Nasdaq
pursuant to Rule 5711(d) and holds multiple crypto assets to qualify
for the listing of options on that ETF, provided Options 4, Section
3(h)(4) has also been met, as well as the listing criteria in Options
4, Section 3(a) and (b) or Options 4, Section 3(h)(1)(ii).
Similar to options on any ETF, an option on a Commodity-Based Trust
that meets the requirements of Options 4, Section 3(h)(vii) would also
be subject to the Exchange's continued listing standards for options on
ETFs set forth in Options 4, Section 4(g). Pursuant to Options 4,
Section 4(g), ETFs approved for options trading pursuant to Options 4,
Section 3(h) will not be deemed to meet the requirements for continued
approval, and the Exchange shall not open for trading any additional
series of option contracts of the class covering such ETFs if the ETFs
are delisted from trading as provided in subparagraph (b)(5) of Options
4, Section 4 \11\ or the ETFs are halted or suspended from trading on
their primary market.\12\ Additionally, options on Commodity-Based
Trusts that are approved subject to Options 4, Section 3(h)(vii) may be
subject to the suspension of opening transactions in any series of
options of the class covering ETFs in any of the following
circumstances: \13\
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\11\ Options 4, Section 4(b)(5) provides, if an underlying
security is approved for options listing and trading under the
provisions of Options 4, Section 3(c), the trading volume of the
Original Security (as therein defined) prior to but not after the
commencement of trading in the Restructure Security (as therein
defined), including `when-issued' trading, may be taken into account
in determining whether the trading volume requirement of (3) of this
paragraph (b) is satisfied.
\12\ See Options 4, Section 4(g).
\13\ See id.
(1) in the case of options covering Exchange-Traded Fund Shares
approved pursuant to Options 4, Section 3(h)(i), in accordance with
the terms of subparagraphs (b)(1), (2), (3) and (4) of Options 4,
Section 4; \14\
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\14\ Options 4, Section 4(b)(1) through (4) provides, if: (1)
there are fewer than 6,300,000 shares of the underlying security
held by persons other than those who are required to report their
security holdings under Section 16(a) of the Act, (2) there are
fewer than 1,600 holders of the underlying security, (3) the trading
volume (in all markets in which the underlying security is traded)
has been less than 1,800,000 shares in the preceding twelve (12)
months, or (4) the underlying security ceases to be an `NMS stock'
as defined in Rule 600 of Regulation NMS under the Act. Options 4,
Section 3(h)(i) refers to Financial Instruments and Money Market
Instruments.
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(2) in the case of options covering Fund Shares approved
pursuant to Options 4, Section 3(h)(ii),\15\ following the initial
twelve-month period beginning upon the commencement of trading in
the Exchange-Traded Fund Shares on a national securities exchange
and are defined as an ``NMS stock'' under Rule 600 of Regulation
NMS, there were fewer than 50 record and/or beneficial holders of
such Exchange-Traded Fund Shares for 30 or more consecutive trading
days;
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\15\ Options 4, Section 3(h)(ii) refers to Currency Trust
Shares.
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(3) the value of the index or portfolio of securities or non-
U.S. currency, portfolio of commodities including commodity futures
[[Page 47458]]
contracts, options on commodity futures contracts, swaps, forward
contracts, options on physical commodities and/or Financial
Instruments and Money Market Instruments, on which the Exchange-
Traded Fund Shares are based is no longer calculated or available;
or
(4) such other event occurs or condition exists that in the
opinion of the Exchange makes further dealing in such options on the
Exchange inadvisable.
Consistent with current Options 4, Section 5, which governs the
opening of options series on a specific underlying security (including
ETFs), the Exchange would open at least one expiration month \16\ for
options on Commodity-Based Trusts that are approved subject to Options
4, Section 3(h)(vii) and may also list series of options for trading on
a weekly \17\ or quarterly \18\ basis. The Exchange may also list long-
term equity option series (``LEAPS'') that expire from twelve to
thirty-nine months from the time they are listed.\19\
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\16\ See Options 4, Section 5(b). At the commencement of trading
on the Exchange of a particular class of options, the Exchange will
open a minimum of one (1) series of options in that class. The
exercise price of that series will be fixed at a price per share,
relative to the underlying stock price in the primary market at
about the time that class of options is first opened for trading on
the Exchange. The monthly expirations are subject to certain listing
criteria for underlying securities described within Options 4,
Section 5. Monthly listings expire the third Friday of the month.
The term ``expiration date'' (unless separately defined elsewhere in
the OCC By-Laws), when used in respect of an option contract
(subject to certain exceptions), means the third Friday of the
expiration month of such option contract, or if such Friday is a day
on which the exchange on which such option is listed is not open for
business, the preceding day on which such exchange is open for
business. See OCC By-Laws Article I, Section 1. Pursuant to Options
4, Section 5(c), additional series of options of the same class may
be opened for trading on the Exchange when the Exchange deems it
necessary to maintain an orderly market, to meet customer demand or
when the market price of the underlying stock moves more than five
strike prices from the initial exercise price or prices. The opening
of a new series of options shall not affect the series of options of
the same class previously opened. New series of options on an
individual stock may be added until the beginning of the month in
which the options contract will expire. Due to unusual market
conditions, the Exchange, in its discretion, may add a new series of
options on an individual stock until the close of trading on the
business day prior to the business day of expiration, or, in the
case of an option contract expiring on a day that is not a business
day, on the second business day prior to expiration.
\17\ See Supplementary .03 to Options 4, Section 5.
\18\ See Supplementary .04 to Options 4, Section 5.
\19\ See Options 4, Section 8.
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Pursuant to Options 4, Section 5(d), which governs strike prices of
series of options on ETFs, the interval between strike prices of series
of options on an ETF, including ETFs listed pursuant to proposed
Options 4, Section 3(h)(vii), would be $1 or greater when the strike
price is $200 or less and $5 or greater when the strike price is
greater than $200.\20\ Additionally, the Exchange may list series of
options pursuant to the $1 Strike Price Interval Program,\21\ the $0.50
Strike Program,\22\ the $2.50 Strike Price Program,\23\ and the $5
Strike Program.\24\ Pursuant to Options 3, Section 3, where the price
of a series of options on an ETF is less than $3.00, the minimum
increment will be $0.05, and where the price is $3.00 or higher, the
minimum increment will be $0.10.\25\ Any and all new series of options
on Commodity-Based Trusts that are approved subject to Options 4,
Section 3(h)(vii) would be subject to the expirations, strike prices,
and minimum increments set forth in Options 4, Section 5 and Options 3,
Section 3, as applicable.
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\20\ The Exchange notes that for options listed pursuant to the
Short Term Option Series Program, the Quarterly Options Series
Program, and the Monthly Options Series Program, Supplementary
Material .03, .04 and .09 to Options 4, Section 5 set forth the
intervals between strike prices on Short Term Option Series,
Quarterly Options Series, and Monthly Options Series, respectively.
\21\ See Supplementary Material .01 to Options 4, Section 5.
\22\ See Supplementary Material .05 to Options 4, Section 5.
\23\ See Supplementary Material .02 to Options 4, Section 5.
\24\ See Supplementary Material .06 to Options 4, Section 5.
\25\ If options on a Commodity-Based Trust are eligible to
participate in the Penny Interval Program, the minimum increment
would be $0.01 for series with a price below $3.00 and $0.05 for
series with a price at or above $3.00. See Supplementary Material
.01 to Options 3, Section 3 (which describes the requirements for
the Penny Interval Program).
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Further, options on Commodity-Based Trusts that are approved
subject to Options 4, Section 3(h)(vii) would trade in the same manner
as options on other ETFs on the Exchange. The Exchange Rules that
currently apply to the listing and trading of all options on ETFs on
the Exchange, including, for example, Rules that govern listing
criteria, expirations, exercise prices, minimum increments, position
and exercise limits, margin requirements, customer accounts and trading
halt procedures would apply to the listing and trading of options on
Commodity-Based Trusts that are approved subject to Options 4, Section
3(h)(vii) in the same manner.
Position and exercise limits for options on Commodity-Based Trusts
that are approved subject to Options 4, Section 3(h)(vii) would be
determined pursuant to Options 9, Sections 13 and 15, respectively, as
is the case for other options on other ETFs. Position and exercise
limits for options on ETFs vary according to the number of outstanding
shares and the trading volumes of the underlying ETF over the past six
months, where the largest in capitalization and the most frequently
traded ETFs have an option position and exercise limit of 250,000
contracts (with adjustments for splits, re-capitalizations, etc.) on
the same side of the market; and smaller capitalization ETFs have
position and exercise limits of 200,000, 75,000, 50,000 or 25,000
contracts (with adjustments for splits, re-capitalizations, etc.) on
the same side of the market. Further, Options 6C, Section 3, which
governs margin requirements and is applicable to the trading of all
options on the Exchange including options on ETFs, will also apply to
the trading of options on Commodity-Based Trusts listed pursuant to
proposed Options 4, Section 3(h)(vii).
The Exchange represents that the same surveillance procedures
applicable to all other options on other ETFs currently listed and
traded on the Exchange will apply to the trading of options on
Commodity-Based Trusts that are approved subject to Options 4, Section
3(h)(vii). The Exchange represents that it has the necessary systems
capacity to support the new option series. The Exchange believes that
its existing surveillance and reporting safeguards are designed to
deter and detect possible manipulative behavior which might potentially
arise from listing and trading options on ETFs, including the listing
of options on Commodity-Based Trusts that are approved subject to
Options 4, Section 3(h)(vii). Also, the Exchange may obtain information
from designated contract markets that are members of the ISG related to
a financial instrument that is based, in whole or in part, upon an
interest in or performance of a crypto asset, as applicable. The
Exchange has specified in proposed Options 4, Section 3(h)(4) that each
crypto asset held by the Commodity-Based Trust must underlie a
derivatives contract that trades on a market with which the Exchange
has a comprehensive surveillance sharing agreement, whether directly or
through common membership in ISG.\26\ The Exchange will be required to
ensure that this requirement is met prior to listing options on a
Commodity-Based Trust listed pursuant to proposed Options 4, Section
3(h)(vii).
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\26\ There are a number of futures contracts on digital asset
commodities that are listed and trading on the CME and Coinbase
Derivatives, both of which are ISG members. See <a href="https://www.cmegroup.com/markets/cryptocurrencies.html#products">https://www.cmegroup.com/markets/cryptocurrencies.html#products</a>. See also
<a href="https://www.coinbase.com/derivatives">https://www.coinbase.com/derivatives</a>.
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Additionally, the Exchange has also analyzed its capacity and
represents that it believes the Exchange and the
[[Page 47459]]
Options Price Reporting Authority or ``OPRA'' have the necessary
systems capacity to handle the additional traffic associated with the
listing of new series of ETFs, including the trading of options on
Commodity-Based Trusts that are approved subject to Options 4, Section
3(h)(vii), up to the number of expirations currently permissible under
the Exchange Rules.
Finally, today, the Exchange lists and trades options on ETFs that
would qualify for listing as an option on a Commodity-Based Trust under
proposed Options 4, Section 3(h)(vii),\27\ and it has not identified
any issues with the listing and trading of options on those ETFs.
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\27\ The following ETFs currently have options listed on them on
the Exchange: iShares Bitcoin Trust, the Fidelity Wise Origin
Bitcoin Fund, the ARK21Shares Bitcoin ETF, the Grayscale Bitcoin
Trust (BTC), the Grayscale Bitcoin Mini Trust BTC, and the Bitwise
Bitcoin ETF. See Options 4, Section 3(h)(iv). The Exchange filed
rule proposals and received the appropriate regulatory notice or
approval to list the aforementioned options on the ETFs.
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\28\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\29\ in particular, in that it is designed to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, to foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities, 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. Additionally, the Exchange
believes the proposed rule change is consistent with the Section
(6)(b)(5) \30\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\28\ 15 U.S.C. 78f(b).
\29\ 15 U.S.C. 78f(b)(5).
\30\ 15 U.S.C. 78(f)(b)(5).
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In particular, the Exchange believes that its proposal to establish
new listing criteria at Options 4, Section 3(h)(vii) with respect to
options on Commodity-Based Trusts, without the need for additional
approvals, will remove impediments to and perfect the mechanism of a
free and open market and a national market system and, in general,
protect investors because it would allow the Exchange to immediately
list and trade qualifying options on Commodity-Based Trusts, provided
the initial listing criteria has been met, without any additional
approvals from the Commission.
Specifically, the Exchange's proposal to adopt Options 4, Section
3(h)(vii) to allow the listing and trading of options on units that
represent interests in Commodity-Based Trusts that meet the generic
criteria of Nasdaq Rule 5711(d),\31\ and hold multiple crypto assets,
is consistent with the Act because it will permit the Exchange to offer
options on certain Commodity-Based Trusts soon after the listing of the
ETF on Nasdaq, provided all listing criteria have been met. Listing
these options will avail market participants of the opportunity to
hedge their positions in the Commodity-Based Trusts in a timely manner,
thereby providing investors with the ability to hedge their exposure to
the underlying Commodity-Based Trust. Options on Commodity-Based Trusts
benefits investors, similar to the listing of any other option on an
ETF, by providing investors with a relatively lower-cost risk
management tool to manage their positions and associated risk in their
portfolios more easily in connection with exposure to the price of a
crypto asset. Additionally, listing options on Commodity-Based Trusts
provides investors with the ability to transact in such options on a
listed market as opposed to the OTC options market, which increases
market transparency and enhances the process of price discovery to the
benefit of all investors.
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\31\ See supra note 3.
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Also, this proposal would permit options on certain Commodity-Based
Trusts to be listed on the Exchange in the same manner as options on
ETFs that are subject to the current listing criteria in Options 4,
Section 3(h). The Exchange notes that the majority of ETFs are able to
list and trade options once the initial listing criteria have been met
without the need for additional approvals. The proposed rule change
would allow options on certain Commodity-Based Trusts to likewise list
and trade once the proposed listing criteria have been met without the
need for additional approvals.
As proposed, the Exchange would list options in a Commodity-Based
Trust that met the generic criteria of Nasdaq Rule 5711(d), provided
the Commodity-Based Trust held multiple crypto assets. Further, these
options on Commodity-Based Trusts would also be required to satisfy the
conditions in proposed Options 4, Section 3(h)(4). Specifically, a
Commodity-Based Trust that met the requirements of proposed Options 4,
Section 3(h)(vii) would also have to satisfy the following requirements
in proposed Options 4, Section 3(h)(4): (A) the total global supply of
each underlying crypto asset held by the Commodity-Based Trust has an
average daily market value of at least $700 million over the last 12
months; and (B) each crypto asset held by the Commodity-Based Trust
underlies a derivatives contract that trades on a market with which the
Exchange has a comprehensive surveillance sharing agreement, whether
directly or through common membership in the ISG.
These requirements are consistent with the Act and the protection
of investors as they should ensure that the underlying ETF has
sufficient liquidity prior to listing options, which will serve to
prevent disruption to the underlying market. The Exchange believes that
market supply serves as a good measure of liquidity to prevent the
addition of options trading on the Commodity-Based Trust from
disrupting the market for the underlying security. Requiring each
underlying crypto asset to have a requisite amount of deliverable
supply, in addition to all the other criteria the ETF is required to
have under Nasdaq Rule 5711, should ensure adequate liquidity prior to
listing. Further, ensuring each crypto asset held by the Commodity-
Based Trust underlies a derivatives contract that trades on a market
with which the Exchange has a comprehensive surveillance sharing
agreement, whether directly or through common membership in the ISG,
will provide the Exchange with information to adequately surveillance
options on qualifying Commodity-Based Trusts. Today, the Exchange has a
comprehensive surveillance sharing agreement in place with both the CME
and Coinbase Derivatives through its common membership in ISG. This
facilitates the sharing of information that is available to the CME and
Coinbase Derivatives through their surveillance of their respective
markets, including their surveillance of their respective digital asset
futures markets.
The Exchange also believes the proposed rule change will remove
impediments to and perfect the mechanism of a free and open market and
a national market system, because it is consistent with current
Exchange Rules, previously filed with the Commission. Options on
qualifying Commodity-Based Trusts must satisfy the initial listing
standards and continued listing standards currently in the Exchange
Rules, applicable to options on all ETFs, including ETFs that hold
other crypto assets already deemed appropriate for options trading on
the Exchange in addition to the proposed criteria. Options on
qualifying
[[Page 47460]]
Commodity-Based Trusts would trade in the same manner as any other ETF
options--the same Exchange Rules that currently govern the listing and
trading of all ETF options, including permissible expirations, strike
prices and minimum increments, and applicable position and exercise
limits and margin requirements, will govern the listing and trading of
options on qualifying Commodity-Based Trusts.
The Exchange represents that it has the necessary systems capacity
to support the listing and trading of options on qualifying Commodity-
Based Trusts. The Exchange believes that its existing surveillance and
reporting safeguards are designed to deter and detect possible
manipulative behavior which might arise from listing and trading of
these options on Commodity-Based Trust, particularly in light of the
additional requirement that each crypto asset held by the Commodity-
Based Trust underlies a derivatives contract that trades on a market
with which the Exchange has a comprehensive surveillance sharing
agreement, whether directly or through common membership in ISG.
Finally, today, the Exchange lists and trades options on ETFs that
would qualify for listing as an option on a Commodity-Based Trust under
proposed Options 4, Section 3(h)(vii),\32\ and it has not identified
any issues with the listing and trading of options on those ETFs.
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\32\ The following ETFs currently have options listed on them on
the Exchange: iShares Bitcoin Trust, the Fidelity Wise Origin
Bitcoin Fund, the ARK21Shares Bitcoin ETF, the Grayscale Bitcoin
Trust (BTC), the Grayscale Bitcoin Mini Trust BTC, and the Bitwise
Bitcoin ETF. See Options 4, Section 3(h)(iv). The Exchange filed
rule proposals and received the appropriate regulatory notice or
approval to list the aforementioned options on the ETFs.
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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 that is not necessary or appropriate
in furtherance of the purposes of the Act.
The Exchange does not believe that the proposal to amend the
listing criteria at Options 4, Section 3(h)(vii), with respect to ETFs,
to adopt new criteria to permit the listing and trading of options on
certain Commodity-Based Trusts that hold multiple crypto assets and
that were listed pursuant to Nasdaq Rule 5711(d), without the need for
additional approvals, will impose any burden on intramarket competition
that is not necessary or appropriate in furtherance of the purposes of
the Act. Options on qualifying Commodity-Based Trusts would need to
satisfy the initial listing standards set forth in the Exchange Rules
in the same manner as any other ETF before the Exchange could list
options on them. Additionally, options on qualifying Commodity-Based
Trusts will be equally available to all market participants who wish to
trade such options. The Exchange Rules currently applicable to the
listing and trading of options on ETFs on the Exchange will apply in
the same manner to the listing and trading of all options on qualifying
Commodity-Based Trusts.
Additionally, the Exchange notes that listing and trading options
on qualifying Commodity-Based Trusts on the Exchange will subject such
options to transparent exchange-based rules as well as price discovery
and liquidity, as opposed to alternatively trading such options in the
OTC market. The Exchange believes that the proposed rule change may
relieve any burden on, or otherwise promote, competition as it is
designed to increase competition for order flow on the Exchange in a
manner that is beneficial to investors by providing them with a lower-
cost option to hedge their investment portfolios in a timely manner.
The Exchange does not believe that the proposal to adopt new
listing criteria at Options 4, Section 3(h)(vii) to permit the listing
and trading of certain options on a Commodity-Based Trust, without the
need for additional approvals, will impose any burden on intermarket
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. Other options exchanges are free to amend their
listing rules, as applicable, to permit them to list and trade options
on Commodity-Based Trusts.
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 (i) as the Commission may
designate up to 90 days of such date 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#d9abacb5bcf4bab6b4b4bcb7adaa99aabcbaf7beb6af"><span class="__cf_email__" data-cfemail="acded9c0c981cfc3c1c1c9c2d8dfecdfc9cf82cbc3da">[email protected]</span></a>. Please include
file number SR-ISE-2025-30 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-ISE-2025-30. 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-ISE-2025-30 and should be submitted on
or before October 22, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\33\
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\33\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-19102 Filed 9-30-25; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on October 1, 2025.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.