Notice2026-05943
Self-Regulatory Organizations; Nasdaq ISE, LLC; Order Approving a Proposed Rule Change, as Modified by Amendment Nos. 1 and 2, Regarding the Adoption of Listing Criteria for Options on Commodity-Based Trusts That Hold 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
March 27, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 59 (Friday, March 27, 2026)</title>
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[Federal Register Volume 91, Number 59 (Friday, March 27, 2026)]
[Notices]
[Pages 14894-14896]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-05943]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105072; File No. SR-ISE-2025-30]
Self-Regulatory Organizations; Nasdaq ISE, LLC; Order Approving a
Proposed Rule Change, as Modified by Amendment Nos. 1 and 2, Regarding
the Adoption of Listing Criteria for Options on Commodity-Based Trusts
That Hold Multiple Crypto Assets
March 24, 2026.
I. Introduction
On September 26, 2025, Nasdaq ISE, LLC (``ISE'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission''),
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to adopt listing criteria for options on
Commodity-Based Trusts that hold multiple crypto assets. The proposed
rule change was published for comment in the Federal Register on
October 1, 2025.\3\ On November 3, 2025, pursuant to Section 19(b)(2)
of the Exchange 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\ On December 17, 2025, the
Exchange filed Amendment No. 1 to the proposed rule change (``Amendment
No. 1''), which supersedes the original filing in its entirety.\6\ On
December 23, 2025, the Commission issued notice of filing of Amendment
No. 1 to the proposed rule change and instituted proceedings pursuant
to Section 19(b)(2)(B) of the Act \7\ to determine whether to approve
or disapprove the proposed rule change, as modified by Amendment No.
1.\8\ The Commission received no comments regarding the proposed rule
change. On December 23, 2025, the Exchange filed Amendment No. 2 to the
proposed rule change (``Amendment No. 2'').\9\ This order approves the
proposed rule change, as modified by Amendment Nos. 1 and 2.
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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. 104107 (Sept. 26,
2025), 90 FR 47456.
\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 104173, 90 FR 51424
(Nov. 17, 2025). The Commission designated December 30, 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\ Amendment No. 1 revises the proposal to: delete proposed ISE
Options 4, Section 3(h)(vii) and incorporate the proposed change to
provide for the listing of options on Commodity-Based Trusts that
hold multiple crypto assets into existing ISE Options 4, Section
3(h)(vi); amend Options 4, Section 3(h)(3) to apply the requirements
in Options 4, Section 3(h)(3) to each crypto asset that a Commodity-
Based Trust holds; correct an erroneous cross-reference in Options
4, Section 4(g); add new Options 4, Section 4(g)(3) to establish a
continued listing requirement for options listed pursuant to Options
4, Section 3(h)(vi); and renumber the remaining subparagraphs in
Options 4, Section 4(g).
\7\ 15 U.S.C. 78s(b)(2)(B).
\8\ See Securities Exchange Act Release No. 104505, 90 FR 61483
(Dec. 31, 2025) (``Order Instituting Proceedings'').
\9\ Amendment No. 2 revises the proposal to correct erroneous
cross-references in proposed Options 4, Section 4(g)(3). Because
Amendment No. 2 is technical in nature, it is not subject to notice
and comment. Amendment No. 2 is available at: <a href="https://www.sec.gov/rules-regulations/public-comments/sr-ise-2025-30">https://www.sec.gov/rules-regulations/public-comments/sr-ise-2025-30</a>.
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II. Description of the Proposed Rule Change, as Modified by Amendment
Nos. 1 and 2
Currently, ISE Options 4, Section 3(h)(vi) allows the Exchange to
list options on shares that represent interests in a Commodity-Based
Trust that meets the generic criteria of The
[[Page 14895]]
Nasdaq Stock Market LLC (``Nasdaq'') Rule 5711(d), except that the
Commodity-Based Trust holds a single crypto asset, as defined in ISE
Options 4, Section 3(h)(3), and provided that (A) the global supply of
the 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)
the 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'').\10\ As described more fully in the Order Instituting
Proceedings,\11\ the Exchange proposes to amend ISE Options 4, Section
3(h) to allow the Exchange to list and trade options on a Commodity-
Based Trust that holds multiple crypto assets.\12\ The proposal would
allow the Exchange to list and trade these options without additional
approval from the Commission.\13\ Under the proposal, each crypto asset
that the Commodity-Based Trust holds must meet the criteria in ISE
Options 4, Section 3(h)(3).\14\ Accordingly, each of the Commodity-
Based Trust's crypto assets must: (A) have an average daily market
value of at least $700 million over the last 12 months; and (B)
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.\15\ The proposed
Commodity-Based Trust share options also must satisfy the Exchange's
initial and continued listing standards applicable to all options on
exchange-traded funds (``ETFs'').\16\ ISE Options 4, Section 3(h)
requires the shares of an ETF underlying listed options to trade on a
national securities exchange and to be an ``NMS stock,'' as defined in
Rule 600 of Regulation NMS under the Exchange Act. In addition, ISE
Options 4, Section 3(h)(1) requires the shares of an ETF to meet the
listing criteria in ISE Options 4, Sections 3(a) and (b) \17\ or ISE
Options 4, Section 3(h)(1)(ii).\18\
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\10\ See ISE Options 4, Section 3(h)(3). ISE Options 4, Section
3(h)(3) defines the term ``crypto asset'' to mean ``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 id.
\11\ See supra note 8.
\12\ The proposal also corrects a grammatical error in ISE
Options 4, Section 3(h)(3).
\13\ See Order Instituting Proceedings, 90 FR at 61486.
\14\ See proposed ISE Options 4, Section 3(h)(3).
\15\ See proposed ISE Options 4, Section 3(h)(3). The Exchange
states that the market value for each crypto asset that a Commodity-
Based Trust holds will be calculated by taking the total global
supply of the crypto asset multiplied by the token price of that
asset. The Exchange states that the total supply of a crypto asset
includes all crypto assets currently issued and does not include
unissued crypto assets. See Order Instituting Proceedings, 90 FR at
61484.
\16\ See Order Instituting Proceedings, 90 FR at 61486-7. In its
proposal, the Exchange refers to Commodity-Based Trust Shares as
ETFs. See id. at 61485, 61487. The Exchange's rules use the term
``exchange-traded fund'' to refer to several types of investment
products, including Commodity-Based Trusts. See ISE Options 4,
Section 3(h).
\17\ See Order Instituting Proceedings, 90 FR at 61484. ISE
Options 4, Section 3(a) states that underlying securities with
respect to which put or call options contracts are approved for
listing and trading on the Exchange must meet the following
criteria: (1) the security must be registered and be an ``NMS
stock'' as defined in Rule 600 of Regulation NMS under the Exchange
Act; and (2) the security shall be characterized by a substantial
number of outstanding shares that are widely held and actively
traded. ISE Options 4, Section 3(b) states, among other things,
that, absent exceptional circumstances, an underlying security will
not be selected for Exchange options transactions unless: (1) there
are a minimum of seven (7) million shares of the underlying security
which are owned by persons other than those required to report their
stock holdings under Section 16(a) of the Exchange Act; (2) there
are a minimum of 2,000 holders of the underlying security; (3) the
issuer is in compliance with any applicable requirements of the
Exchange Act; (4) trading volume (in all markets in which the
underlying security is traded) has been at least 2,400,000 shares in
the preceding twelve (12) months; and (5) either: (i) if the
underlying security is a ``covered security'' as defined under
Section 18(b)(1)(A) of the Securities Act of 1933: (A) the market
price per share of the underlying security has been at least $3.00
for the previous three consecutive business days preceding the date
on which the Exchange submits a certificate to the Clearing
Corporation for listing and trading, as measured by the closing
price reported in the primary market in which the underlying
security is traded; however, (B) the requirements set forth in
(5)(i)(A) will be waived during the three days following its initial
public offering day for an underlying security having a market
capitalization of at least $3 billion based upon the offering price
of its initial public offering, and may be listed and traded
starting on or after the second business day following the initial
public offering day; or (ii) if the underlying security is not a
``covered security,'' the market price per share of the underlying
security has been at least $7.50 for the majority of business days
during the three calendar months preceding the date of selection, as
measured by the lowest closing price reported in any market in which
the underlying security traded on each of the subject days.
\18\ ISE Options 4, Section 3(h)(ii) states that the shares of
an ETF 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 ETF 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 ETF shares, all as described in
the ETF shares' prospectus.
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The continued listing criteria in proposed ISE Options 4, Section
4(g)(3) will allow the Exchange to suspend opening transactions in
options on Commodity-Based Trust shares if any crypto asset held by the
Commodity-Based Trust (A) no longer has an average daily market value
of at least $700 million over the last 12 months, as determined by the
Exchange on a monthly basis; or (B) no longer 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. The Exchange states that requiring
the average daily market value criterion to be met on a monthly basis
is reasonable given that the Exchange believes that it is unlikely that
a crypto asset with an average daily market value of at least $700
million over the previous twelve months would fail to meet that
standard as a result of trading over a relatively short period of
time.\19\
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\19\ See Order Instituting Proceedings, 90 FR at 61484. For
example, the Exchange states that a crypto asset with market
capitalization of $500 million for 15 days in a 20-day trading month
could lose up to 88% of its value and continue to meet the criteria.
See id.
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Options on Commodity-Based Trust shares also will be subject to the
continued listing standards in ISE Options 4, Sections 4(g).\20\ Under
ISE Options 4, Section 4(g), shares of an ETF approved for options
trading pursuant to ISE Options 4, Section 3(h) would not meet the
requirements for continued approval if the shares were delisted from
trading as provided in ISE Options 4, Section 4(b)(4) because the
underlying security was no longer an NMS stock, as defined in Rule 600
of Regulation NMS under the Exchange Act, or if the shares were halted
or suspended from trading on their primary market.\21\ Further, ISE
Options 4, Section 4(g)(4) (renumbered as ISE Options 4, Section
4(g)(5)) would allow the Exchange to consider suspending opening
transactions in options on Commodity-Based Trust shares if the Exchange
believes that further dealing in the options on the Exchange is
inadvisable.\22\
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\20\ See id.
\21\ See ISE Options 4, Section 4(g). See also Order Instituting
Proceedings, 90 FR at 61484. The Exchange also proposes to correct
an erroneous cross-reference in Options 4, Section 4(g).
\22\ See Order Instituting Proceedings, 90 FR at 61485.
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The Exchange states that the proposed options on Commodity-Based
Trust shares would trade in the same manner as other ETF options on the
Exchange and will be subject to Exchange rules that currently apply to
the listing and trading of ETF options, including
[[Page 14896]]
Exchange rules governing, for example, expirations, exercise prices,
minimum increments, position and exercise limits, margin requirements,
customer accounts, and trading halt procedures.\23\ The Exchange states
that position and exercise limits for options on Commodity-Based Trust
shares will be determined pursuant to Options 9, Sections 13 and
15.\24\
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\23\ See id.
\24\ See id.
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The Exchange represents that the same surveillance procedures
applicable to all ETF options currently listed and traded on the
Exchange will apply to the trading of options on Commodity-Based Trust
shares that are approved subject to ISE Options 4, Section
3(h)(vi).\25\ The Exchange states 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 Commodity-Based Trust shares that are approved
subject to Options 4, Section 3(h)(vi).\26\ The Exchange states that it
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.\27\ In addition, the Exchange states that it currently
lists options that would qualify for listing under proposed ISE Options
4, Section 3(h)(vi), and that it has not identified any issues with the
listing and trading of these options.\28\
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\25\ See id.
\26\ See id.
\27\ See id.
\28\ See id. The Exchange states that it currently lists options
on shares of the following funds: the 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 id. at footnote 28.
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The Exchange states that both the Exchange and the Options Price
Reporting Authority (``OPRA'') have the necessary systems capacity to
handle the additional traffic associated with the listing of the
proposed options on the Commodity-Based Trust shares.\29\
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\29\ See id. at 61486.
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III. Discussion and Commission Findings
After careful review, the Commission finds that the proposed rule
change, as modified by Amendment Nos. 1 and 2, is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to a national securities exchange.\30\ Specifically, the
Commission finds that the proposed rule change is consistent with
Section 6(b)(5) of the Act,\31\ which requires, among other things,
that the rules of a national securities exchange be designed to prevent
fraudulent and manipulative acts and practices, to remove impediments
to and perfect the mechanism of a free and open market, and, in
general, to protect investors and the public interest.
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\30\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\31\ 15 U.S.C. 78f(b)(5).
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The Exchange proposes to amend ISE Options 4, Section 3(h)(vi) to
permit the Exchange to list options on shares of a Commodity-Based
Trust that holds multiple crypto assets, provided that the Commodity-
Based Trust meets certain requirements, as described above. The
proposal will allow ISE to list options on shares of these Commodity-
Based Trusts without further approval from the Commission, thereby
permitting the Exchange to list these options soon after Nasdaq lists
the underlying Commodity-Based Trust shares. Permitting the listing and
trading of these options on the Exchange will provide investors with an
additional vehicle for gaining and hedging exposure to the underlying
Commodity-Based Trust shares.
Options on shares of Commodity-Based Trusts that hold multiple
crypto assets will be subject to the same initial and continued listing
requirements for options on Commodity-Based Trusts that hold a single
crypto asset except that each crypto asset that a Commodity-Based Trust
holds must (A) have an average daily market value of at least $700
million over the last 12 months; and (B) 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. The requirements in proposed Options
4, Section 3(h)(3)(A) are designed to help ensure that each of the
crypto assets that a Commodity-Based Trust holds is sufficiently liquid
that the creation and redemption process for shares of the Commodity-
Based Trust will operate without disruption and that Commodity-Based
Trust shares will be available to options market makers and other
market participants that may use Commodity-Based Trust shares to hedge
their positions. The Exchange will consider suspending opening
transactions in Commodity-Based Trust share options if the requirements
in proposed ISE Options 4, Section 3(h)(3) are no longer satisfied.\32\
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\32\ See proposed ISE Options 4, Section 4(g)(3).
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The Exchange represents that the same surveillance procedures
applicable to ETF options currently listed and traded on the Exchange
will apply to the trading of options on Commodity-Based Trust
shares.\33\ The Exchange states that its existing surveillance and
reporting safeguards are designed to deter and detect possible
manipulative behavior that might arise from listing and trading options
on ETFs, including the listing of options on Commodity-Based Trust
shares.\34\ As discussed above, each crypto asset held by a 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.\35\
This requirement, in addition to the Exchange's existing surveillance
procedures, should assist the Exchange in investigating suspected
manipulations or other trading abuses in Commodity-Based Trust share
options.
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\33\ See Order Instituting Proceedings, 90 FR at 61485.
\34\ See id.
\35\ See proposed ISE Options 4, Section 3(h)(3)(B).
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Finally, the proposed changes to correct a grammatical error in ISE
Options 3, Section 3(h)(vi) and to revise the erroneous cross-reference
in ISE Options 4, Section 4(g) will help to ensure the accuracy of the
Exchange's rules.
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\36\ that the proposed rule change (SR-ISE-2025-30), as modified by
Amendment Nos. 1 and 2, is approved.
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\36\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\37\
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\37\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-05943 Filed 3-26-26; 8:45 am]
BILLING CODE 8011-01-P
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