Notice2026-12037
Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing of Amendment No. 1 and Designation of a Longer Period for Commission Action on a Proposed Rule Change, as Modified by Amendment No. 1, To Amend Rule 5711(d) To Modify the Generic Listing Standards for 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 16, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 115 (Tuesday, June 16, 2026)</title>
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[Federal Register Volume 91, Number 115 (Tuesday, June 16, 2026)]
[Notices]
[Pages 36185-36190]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-12037]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105672; File No. SR-NASDAQ-2026-032]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing of Amendment No. 1 and Designation of a Longer Period
for Commission Action on a Proposed Rule Change, as Modified by
Amendment No. 1, To Amend Rule 5711(d) To Modify the Generic Listing
Standards for Commodity-Based Trust Shares
June 11, 2026.
On April 14, 2026, 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 amend Rule
5711(d) to modify the generic listing standards for Commodity-Based
Trust Shares. The proposed rule change was published for comment in the
Federal Register on April 28, 2026.\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. 105293 (Apr. 23,
2026), 91 FR 22883. The Commission has received no comment letters
on the proposed rule change.
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On June 9, 2026, the Exchange filed Amendment No. 1 to the proposed
rule change, which replaces and supersedes the original filing in its
entirety. The proposed rule change, as modified by Amendment No. 1, is
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, as modified by Amendment No. 1,
from interested persons, and to designate a longer period for
Commission action on the proposed rule change, as modified by Amendment
No. 1.
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Rule 5711(d) to modify the generic
listing standards for Commodity-Based Trust Shares (as defined below)
to: (1) allow for a buffer of up to 15% of the net asset value
(``NAV'') of the Commodity-Based Trust Shares holdings to consist of
certain assets that do not meet the eligibility criteria under the
generic listing standards; (2) add a definition for digital commodity
(as defined below); and (3) allow for actively-managed strategies.
The Exchange initially submitted this rule filing on April 14, 2026
(the ``Initial Filing''). This Amendment No. 1 supersedes the Initial
Filing and replaces it in its entirety. This Amendment No. 1 amends the
Initial Filing by: (1) specifying what assets may be included in the
15% buffer; (2) adding ``digital commodity'' (as defined below) as a
defined term; and (3) adding provisions to allow for actively-managed
strategies.
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 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 previously received approval to adopt generic listing
standards (``GLS'') for Commodity-Based Trust Shares.\4\ The Exchange
proposes to amend Rule 5711(d) to modify the GLS for Commodity-Based
Trust Shares \5\ to (1) allow for a buffer
[[Page 36186]]
of up to 15% of the NAV of the Commodity-Based Trust Shares holdings to
consist of certain assets that do not meet the GLS eligibility
criteria; (2) add a definition for digital commodity (as defined
below); and (3) allow for actively-managed Commodity-Based Trust
Shares. Each change is discussed in detail below.
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\4\ See Securities Exchange Act Release No. 103995 (September
17, 2025), 90 FR 45414 (September 22, 2025) (SR-NASDAQ-2025-056; SR-
CboeBZX-2025-104; SR-NYSEARCA-2025-54) (Order Granting Accelerated
Approval of Proposed Rule Changes, as Modified by Amendments
Thereto, to Adopt Generic Listing Standards for Commodity-Based
Trust Shares) (``GLS Approval Order'').
\5\ The term ``Commodity-Based Trust Shares'' refers to a type
of exchange-traded product (``ETP'') and 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. See current Rule
5711(d)(iii)(A). As discussed later in this filing, the Exchange is
proposing to amend this definition to allow for actively-managed
strategies.
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15% Buffer and Digital Commodity
Today, the GLS in Rule 5711(d)(iii)(A)(3) contemplates that
Commodity-Based Trust Shares may hold one or more commodities \6\ or
commodity-based assets,\7\ and in addition to such commodities or
commodity-based assets, may hold securities, cash, and cash
equivalents.\8\ Rule 5711(d)(iv) sets forth specific eligibility
requirements that the commodity, commodity-based asset, and security
holdings of Commodity-Based Trust Shares must meet on an initial and,
with the exception of subparagraph (A)(3) as described below, on a
continuing basis. In particular, subparagraph (A) sets forth the
eligibility requirements for commodity and commodity-based asset
holdings of Commodity-Based Trust Shares. Specifically, each commodity
or commodity that underlies a commodity-based asset held by the Trust
must fall into at least one of the following categories in
subparagraphs (A)(1)-(3):
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\6\ The term ``commodity'' is as defined in Section 1a(9) of the
Commodity Exchange Act that is not an ``excluded commodity'' as
defined in Section 1a(19) of the Commodity Exchange Act. See Rule
5711(d)(iii)(B).
\7\ The term ``commodity-based asset'' means any future, option,
or swap on a commodity. See Rule 5711(d)(iii)(C).
\8\ The term ``cash equivalent'' means short-term instruments
with maturities of less than three months as follows: (1) U.S.
Government securities, including bills, notes, and bonds differing
as to maturity and rates of interest, which are either issued or
guaranteed by the U.S. Treasury or by U.S. Government agencies or
instrumentalities; (2) certificates of deposit issued against funds
deposited in a bank or savings and loan association; (3) bankers'
acceptances, which are short-term credit instruments used to finance
commercial transactions; (4) repurchase agreements and reverse
repurchase agreements; (5) bank time deposits, which are monies kept
on deposit with banks or savings and loan associations for a stated
period of time at a fixed rate of interest; (6) commercial paper,
which are short-term unsecured promissory notes; and (7) money
market funds. See Rule 5711(d)(iii)(D).
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<bullet> (1) the commodity trades on a market that is an
Intermarket Surveillance Group (``ISG'') member; provided that the
Exchange may obtain information about trading in such commodity from
the ISG member; or
<bullet> (2) the commodity underlies a futures contract that has
been made available to trade on a designated contract market for at
least six months; provided that the Exchange has a comprehensive
surveillance sharing agreement, whether directly or through common
membership in ISG, with such designated contract market; or
<bullet> (3) on an initial basis only, an exchange-traded fund
(``ETF'') designed to provide economic exposure of no less than 40% of
its NAV to the commodity lists and trades on a national securities
exchange.
The current GLS therefore requires that all commodity or commodity-
based asset holdings of the Commodity-Based Trust Share must qualify
under one or more of the above eligibility criteria. These criteria are
generally designed to ensure that the Exchange can obtain information
regarding trading in the commodities or commodities underlying
commodity-based assets held by the Trust issuing the Commodity-Based
Trust Shares, which would assist in monitoring trading in such Shares
on the Exchange and to deter and detect violations of Exchange rules
and applicable federal securities laws, thereby making the Commodity-
Based Trust Shares less readily susceptible to fraud and manipulation.
In addition, subparagraph (B) of Rule 5711(d)(iv) sets forth the
eligibility requirements for the Trust's security holdings.
Specifically, if the Trust holds any securities, each security held by
the Trust would need to meet the criteria of Rule 5735 (Managed Fund
Shares), Sections b(1)(A) and (B), or if the security is a listed
option, trades on an ISG market. Essentially, the GLS requires that the
security holdings of the Commodity-Based Trust Shares be either an
equity security or a fixed income security, as defined in Rule
5735(b)(1)(A) and (B), respectively, and meet the listing standards
thereunder, or if the security holdings are listed options, they trade
on an ISG market. The Commission previously found that the generic
listing standards for Managed Fund Shares consistent with the Exchange
Act, including the requirements relating to component equity and fixed
income securities underlying Managed Fund Shares.\9\ Further, with
respect to listed options, ISG membership would help to ensure the
availability of information necessary to detect and deter potential
manipulations and other trading abuses, thereby making the Commodity-
Based Trust Shares less readily susceptible to manipulation.
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\9\ See Securities Exchange Act Release No. 78397 (July 22,
2016), 81 FR 49320 (July 27, 2016) (NYSEARCA-2015-110) (approving
NYSE Arca's generic listing standards for Managed Fund Shares);
Securities Exchange Act Release No. 78396 (July 22, 2016), 81 FR
49698 (July 28, 2016) (SR-BATS-2015-100) (approving BZX's generic
listing standards for Managed Fund Shares); Securities Exchange Act
Release No. 78918 (Sep. 23, 2016), 81 FR 67033 (Sep. 29, 2016) (SR-
NASDAQ-2016-104) (approving Nasdaq's generic listing standards for
Managed Fund Shares).
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The Exchange now proposes to amend Rule 5711(d)(iv) to allow up to
15% of the NAV of the Commodity-Based Trust Shares holdings to consist
of certain assets that do not meet the GLS eligibility criteria in
subparagraph (A) and (B) of Rule 5711(d)(iv) as described above.
Specifically, new subparagraph (C) of Rule 5711(d)(iv) will provide
that notwithstanding the eligibility requirements described above, up
to 15% of the NAV of the Commodity-Based Trust Shares holdings in the
aggregate may consist of (i) digital commodities that do not meet the
criteria in subparagraph (A) of Rule 5711(d)(iv), or (ii) securities
that do not meet the criteria in subparagraph (B) of Rule 5711(d)(iv).
For purposes of calculating the 15% limitation, any derivatives held by
the Trust will be calculated based on its gross notional value.\10\
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\10\ Today, the Exchange similarly calculates percentage
limitations on listed and over-the-counter (``OTC'') derivatives in
its Managed Fund Shares rule based on the aggregate gross notional
value of the listed and OTC derivatives. See Rule 5735(b)(1)(D) and
(E).
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In connection with the proposed adoption of the 15% buffer, the
Exchange also proposes to add a definition for ``digital commodity'' in
new subparagraph (D) of Rule 5711(d)(iii). In connection with this
change, the Exchange will also renumber current subparagraphs (D)-(J)
to proposed subparagraphs (E)-(K). As proposed, the term ``digital
commodity''
[[Page 36187]]
will mean a commodity that is a digital asset and is intrinsically
linked to and derives its value from the programmatic operation of a
functional crypto system, as well as supply and demand dynamics, rather
than from the expectations of profits from the essential managerial
efforts of others. The Exchange is adopting this definition to make
clear what types of digital assets may be included within the 15%
buffer described above. The Exchange notes that the proposed definition
of digital commodity is informed by the joint interpretative guidance
issued by the SEC and the Commodity Futures Trading Commission
(``CFTC''), effective March 23, 2026.\11\ The Exchange represents that
to the extent legislation is enacted defining ``digital commodity'' or
a substantially similar term, the Exchange will submit a rule filing to
conform the definition in the GLS to the statutory definition. The
proposed changes would effectively exclude other commodities such as
non-fungible assets or non-fungible collectibles from being included in
the 15% buffer for generically listed Commodity-Based Trust Shares.\12\
However, this would not preclude the Exchange from submitting a 19b-4
rule filing to seek the listing and trading of a Commodity-Based Trust
Share that holds other commodities, including commodities that fall
outside of the definition of digital commodity, if it determines to do
so at a later date. The Exchange notes that generic listing standards
are generally intended to apply to products that were known and
contemplated at the time of adoption (e.g., Commodity-Based Trust
Shares holding digital commodities). They are not intended to apply to
novel products or materially distinct structures that were not
considered when the standards were adopted. As it relates to the GLS
for Commodity-Based Trust Shares, the products that were known and
contemplated at the time of adoption included, for example, Commodity-
Based Trust Shares holding digital commodities. The Exchange therefore
believes it is appropriate to delineate the scope of what can be
included in the 15% buffer to digital commodities.
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\11\ See ``Application of the Federal Securities Laws to Certain
Types of Crypto Assets and Certain Transactions Involving Crypto
Assets,'' 91 FR 13714 (March 23, 2026).
\12\ The Exchange notes that this Amendment No. 1 removes the
Initial Filing's proposed exclusion of non-fungible assets and
collectibles from the definition of commodity in Rule
5711(d)(iii)(B). With the proposed definition of digital commodity,
combined with the specificity of the 15% buffer provision to apply
to digital commodities and securities, the Exchange believes that
the Initial Filing's exclusion is no longer necessary.
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As proposed, the GLS will still require that at least 85% of the
NAV of the Commodity-Based Trust Shares holdings be comprised of assets
that are already allowed under the GLS.\13\ Further, the Trust must
otherwise comply with all applicable requirements of the GLS (e.g.,
Rule 5711(d)(v)'s website disclosure requirements) in order for the
Commodity-Based Trust Share to be generically listed. The sponsor of
the Commodity-Based Trust Share must monitor compliance with this 85%
threshold daily, and must promptly notify the Exchange if the
Commodity-Based Trust Share breaches this requirement.\14\
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\13\ Specifically, the Exchange will still require that at least
85% of the NAV of the Commodity-Based Trust Shares holdings consist
of (i) commodities, commodity-based assets, and securities that meet
the eligibility criteria in subparagraphs (A) and (B) of Rule
5711(d)(iv), and/or (ii) cash and cash equivalents.
\14\ The Exchange notes that generally speaking, a company with
securities listed under the Rule 5700 Series must provide the
Exchange with prompt notification after the company becomes aware of
any noncompliance by the company with the requirements of the Rule
5700 Series. See Rule 5701(d). Further, the Commodity-Based Trust
Shares rule requires that an issuer of Commodity-Based Trust Shares
must notify the Exchange of any failure to comply with the continued
listing requirements. See Supplementary Material .03 to Rule
5711(d).
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The following examples illustrate how the 15% buffer will be
applied:
1. A Commodity-Based Trust Share (``CBTS'') holds $95 million in
market value of Bitcoin, Ether, Solana, and XRP, which all presently
qualify as eligible commodities under Rule 5711(d)(iv)(A)(2) and (3)
(i.e., each commodity underlies a futures contract that has been
trading on an ISG market for at least 6 months, and has an ETF that
provides at least 40% economic exposure to the commodity). The CBTS
also holds $5 million in market value in several digital commodities
that do not presently qualify as eligible commodities under the GLS.
Because at least 95% of the Trust's NAV ($95 million/$100 million =
95%) meets the eligibility criteria under Rule 5711(d)(iv)(2) and (3),
and the additional 5% consists of digital commodities that do not meet
the eligibility criteria, consistent with the 15% buffer, the CBTS
would qualify under the proposed generic criteria.
2. A CBTS holds gold and gold futures contracts. Both assets
presently qualify as an eligible commodity or commodity-based asset
under Rule 5711(d)(iv)(A)(2) because the commodity (gold) underlies
gold futures contracts that are listed and trading on an ISG market for
at least six months. The gold held by the Trust has a market value of
$80 million. The gold futures contract trading unit size is 100 troy
ounces and an ounce of gold is currently worth $4,000. The Trust holds
100 gold futures contracts with a gross notional value of $40 million
(100 contracts * 100 troy ounces * $4,000). Both the gold and gold
futures holdings of $120 million in total (100% of NAV) would meet the
eligibility criteria under Rule 5711(d)(iv)(A)(2). As such, the CBTS
would qualify under the proposed generic criteria.
3. A CBTS holds bitcoin and OTC call options on a bitcoin ETF.
Bitcoin presently qualifies as an eligible commodity under Rule
5711(iv)(A)(2) and (3) (i.e., bitcoin underlies a futures contract that
has been trading on an ISG market for at least 6 months, and has an ETF
that provides at least 40% economic exposure to bitcoin). The bitcoin
held by the Trust currently has a market value of $100 million. The
Trust also holds 5,000 OTC call options (with each option contract
representing 100 shares) on a bitcoin ETF with a current market price
of $80 per share, resulting in a gross notional value of $40 million
(5,000 option contracts * 100 option contract multiplier * $80 share
price). Because these options are traded over-the-counter rather than
on an ISG market, they do not meet the GLS eligibility criteria for
securities under Rule 5711(d)(iv)(B). Accordingly, only the bitcoin
holdings of $100 million or ~71% of NAV ($100 million/$140 million =
71.42%) would meet the GLS eligibility criteria under Rule
5711(d)(iv)(A)(2) and (3). While the CBTS could hold up to 15% of OTC
options under the 15% buffer, here, the OTC options exceed the 15%
limitation. Accordingly, the CBTS would not qualify under the proposed
generic criteria.
The Exchange notes that the proposed 15% buffer for Commodity-Based
Trust Shares is consistent with the thresholds recently approved by the
Commission for similar digital commodity-based ETPs.\15\ In those
filings, the Commission
[[Page 36188]]
approved the listing and trading of digital commodity-based ETPs
holding a diversified portfolio of underlying digital commodities that
tracked transparent, rules-based indexes. There, the Commission found
that the requirement that the Trusts hold at least 85% of its
investments in assets approved by the Commission to underlie an ETP as
primary investments (and the rest of its assets in other digital
commodities) would enable adequate surveillance of the Shares on the
Exchange, and found that the Exchange's rules were designed to prevent
fraud and manipulation.\16\ Although the ETPs in the Grayscale Order
and Bitwise Order were listed under a different listing rule for Trust
Units,\17\ the Exchange believes that the policy rationale applies with
equal force to Commodity-Based Trust Shares listed under Rule 5711(d).
Here, the Exchange is proposing to require that at least 85% of the NAV
of the Trust's holdings be composed of assets that already qualify
under the GLS (i.e., commodities, commodity-based assets, and
securities that meet the eligibility criteria in Rule 5711(d)(iv) as
well as cash and cash equivalents). These eligibility criteria are
designed to assist the Exchange in monitoring trading in such Shares on
the Exchange, thereby mitigating risks around fraud and manipulation.
Also the Exchange is proposing to limit the 15% buffer to just digital
commodities and securities that do not meet the eligibility criteria.
The Exchange therefore believes that its proposal similarly strikes an
appropriate balance between ensuring that the primary exposure of the
ETP is to assets meeting established eligibility standards approved by
the Commission, and allowing limited exposure to certain additional
assets that enhance diversification and flexibility without undermining
market integrity or investor protection.
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\15\ See Securities Exchange Act Release Nos. 103996 (September
17, 2025) (SR-NYSEARCA-2024-87) (Order Setting Aside Action by
Delegated Authority and Approving a Proposed Rule Change, as
Modified by Amendment No. 1, to Amend NYSE Arca Rule 8.500-E (Trust
Units) and to List and Trade Shares of the Grayscale Digital Large
Cap Fund LLC under Amended NYSE Arca Rule 8.500-E (Trust Units))
(``Grayscale Order''); and 104212 (November 18, 2025) (SR-NYSEARCA-
2024-98) (Order Setting Aside Action by Delegated Authority and
Approving a Proposed Rule Change, as Modified by Amendment No. 1, to
Amend NYSE Arca Rule 8.500-E (Trust Units) and to List and Trade
Shares of the Bitwise 10 Crypto Index ETF under Amended NYSE Arca
Rule 8.500-E (Trust Units)) (``Bitwise Order'').
\16\ See Grayscale Order and Bitwise Order, supra note 14.
\17\ ``Trust Units'' are listed on the Exchange under Rule
5711(i).
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Actively-Managed Commodity-Based Trust Shares
Rule 5711(d)(iii)(A)(2) currently requires Commodity-Based Trust
Shares to be designed to reflect the performance of one or more
reference assets or an index of reference assets, less expenses, and
other liabilities. In other words, Commodity-Based Trust Shares are
required to be passively managed under the GLS. The Exchange now
proposes to delete paragraph (A)(2) and a similar provision in
paragraph (A)(3) in order to allow for both passively- and actively-
managed strategies. The Exchange will also make non-substantive changes
to renumber the paragraphs in the definition of Commodity-Based Trust
Shares to reflect the deletion of paragraph (A)(2). The Exchange also
proposes in proposed paragraph (A)(2) (currently paragraph (A)(3)) to
add the phrase ``consistent with the Trust's investment objective and
policies'' to align with language in the Exchange's Managed Fund Shares
rule in Rule 5735(c)(1), which governs the listing of actively-managed
ETFs today.
The Exchange also proposes to implement additional requirements
around material non-public information in Rule 5711(d)(x) that would
apply specifically to actively-managed Commodity-Based Trust Shares. In
particular, proposed Rule 5711(d)(x)(3) will provide that any person
associated with, or is an agent of (including Reporting Authority
(defined below)), the Trust who has access to non-public information
regarding the portfolio of the Commodity-Based Trust Shares, including
any change thereto, must be subject to procedures designed to prevent
the use and dissemination of material non-public information regarding
the portfolio. In connection with this change, the Exchange proposes to
add a definition for Reporting Authority in proposed Rule
5711(d)(iii)(L), which would provide that the term ``Reporting
Authority'' with respect to Commodity-Based Trust Shares means an
institution or reporting service designated by the Exchange or the
Trust as the official source for calculating and reporting information
relating to the CBTS, including, but not limited to, its portfolio, the
amount of any cash distribution to holders of Commodity-Based Trust
Shares, net asset value, or other information relating to the issuance,
redemption or trading of Commodity-Based Trust Shares. Each Commodity-
Based Trust Shares may have more than one Reporting Authority, each
having different functions.\18\ In connection with the foregoing
changes, the Exchange will also make a non-substantive change to
renumber existing Rule 5711(d)(x)(3) to (4). These additional
requirements are substantively rooted in the current prohibitions
against the use and dissemination of material non-public information
within the Exchange's rules governing actively-managed ETFs, and would
apply to anyone associated with, or is an agent of, the Trust who has
access to non-public information regarding the Trust's portfolio. These
proposed requirements would apply in addition to what is already
required under Rule 5711(d)(x).\19\ The proposed requirements would
provide additional protection against the potential misuse of material,
non-public information relating to the Trust's actively-managed
portfolio.
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\18\ See, e.g., Rule 5735(c)(4) (Managed Fund Shares) for
similar provisions.
\19\ See Rule 5735(g) (Managed Fund Shares) (setting forth
firewall and procedure requirements that apply to the investment
adviser to the investment company issuing Managed Fund Shares and to
personnel who make decisions on the investment company's portfolio
composition). See also Rules 5704(b)(1)(B)(i) (Exchange Traded Fund
Shares) (setting forth firewall and procedure requirements that
apply to the investment adviser to an Exchange Traded Fund and to
personnel who make decisions on the Exchange Traded Fund's portfolio
composition) and 5704(b)(1)(B)(ii) (setting forth procedure
requirements that apply to the ``Reporting Authority'' that provides
information relating to the Exchange Traded Fund's portfolio).
Nasdaq Rule 5704(a)(1)(C) defines ``Reporting Authority'' to mean
Nasdaq, a wholly-owned subsidiary of Nasdaq, or an institution or
reporting service designated by Nasdaq or its subsidiary as the
official source for calculating and reporting information relating
to Exchange Traded Fund Shares series, including, but not limited
to, any current index or portfolio value; the current value of the
portfolio of any securities required to be deposited in connection
with issuance of Exchange Traded Fund Shares; the amount of any
dividend equivalent payment or cash distribution to holders of
Exchange Traded Fund Shares, net asset value, and other information
relating to the issuance, redemption or trading of Exchange Traded
Fund Shares.
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Additionally, while the actively-managed Commodity-Based Trust
Share would be subject to the existing trading halt requirements of
Rule 5711(d)(ix), proposed Rule 5711(d)(ix)(B) will provide that if the
Exchange becomes aware that the information required by paragraph
(v)(A) is not disseminated to all market participants at the same time,
it will halt trading in the Commodity-Based Trust Shares until such
time as the information required by paragraph (v)(A) is available to
all market participants.\20\ The Exchange also proposes to make
aligning changes in Rule 5711(d)(ix)(A)(3), which currently provides
that the Exchange may halt trading during the day in which the
interruption to the information set forth in Rule 5711(d) is not being
disclosed in accordance with the requirements of Rule 5711(d)(v), and
that if the
[[Page 36189]]
interruption persists past the trading day in which it occurred, the
Exchange would halt trading no later than the beginning of the trading
day following the interruption. The Exchange now proposes to add a
proviso at the end of this Rule that if the Exchange becomes aware that
the information required by paragraph (v)(A) is not disseminated to all
market participants at the same time, it will halt trading pursuant to
proposed subparagraph (B), as described above. This additional trading
halt requirement is substantively identical to the Exchange's rule
governing the listing and trading of actively managed ETFs, and would
apply in addition to what is required under Rule 5711(d)(ix).\21\ This
additional trading halt requirement will help ensure that all market
participants have transparency relating to the Trust's underlying
portfolio, which information is key to pricing the Commodity-Based
Trust Shares, and that no market participant has an unfair
informational advantage. Ensuring such transparency relating to the
Trust's underlying portfolio for all market participants will help
facilitate a fair and orderly market for the Commodity-Based Trust
Shares, as well as help to ensure that the Commodity-Based Trust Shares
are not susceptible to manipulation.
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\20\ Pursuant to paragraph (v)(A) of Rule 5711(d), the Trust
must disclose prominently on its website, which is publicly
available and free of charge, the following information: (A) Before
the opening of regular trading on the Exchange, for the Trust's
commodities, commodity-based assets, securities, cash and cash
equivalent, to the extent applicable: (1) ticker symbol; (2)
identifier; (3) description of the holding; (4) the quantity of each
commodity, commodity-based asset, security, cash, and cash
equivalent held; and (5) percentage weighting of the Trust's assets.
\21\ See Rule 5735(d)(2)(D) (Managed Fund Shares).
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Actively-managed ETFs have become a significant and growing segment
of the U.S. and global ETF markets. For example, in 2024, around 49% of
all ETFs launched globally were active, and in the U.S., active ETF
launches outnumbered index launches by nearly 4:1.\22\ Active ETFs in
the U.S. represent the vast majority of total ETF launches in 2025,\23\
with over a third of U.S. ETF inflows coming from active strategies
over the past two years.\24\ By the end of 2025, approximately 83% of
the year's new ETFs were actively managed.\25\ The Exchange believes
that these figures demonstrate substantial market demand in actively-
managed strategies, and that this proposal would benefit investors by
providing a transparent, regulated investment vehicle as an alternative
to less regulated avenues that investors could use to obtain commodity
(including digital commodity) exposure.
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\22\ See ``Decoding active ETFs,'' BlackRock, available at
<a href="https://www.ishares.com/us/literature/whitepaper/decoding-active-etfs.pdf">https://www.ishares.com/us/literature/whitepaper/decoding-active-etfs.pdf</a>.
\23\ See ``How active ETFs are unlocking innovation and
opportunity for investors,'' BlackRock, available at <a href="https://www.ishares.com/us/insights/active-etf-investors">https://www.ishares.com/us/insights/active-etf-investors</a> (``Active ETFs
accounted for 88% of all U.S.-listed ETF launches through June 2025,
and 51% of global ETF launches.''); see also ``Monthly Active ETF
Monitor (August 31, 2025),'' J.P.Morgan, available at <a href="https://am.jpmorgan.com/content/dam/jpm-am-aem/americas/us/en/insights/etf-insights/monthly-active-etf.pdf">https://am.jpmorgan.com/content/dam/jpm-am-aem/americas/us/en/insights/etf-insights/monthly-active-etf.pdf</a> (``60 active ETFs were launched in
August. Active ETFs represent 85% of total ETF launches in 2025.'').
\24\ See ``Decoding active ETFs,'' BlackRock, available at
<a href="https://www.ishares.com/us/literature/whitepaper/decoding-active-etfs.pdf">https://www.ishares.com/us/literature/whitepaper/decoding-active-etfs.pdf</a> (``31% of net asset inflows come from actively managed
strategies,'' sourcing BlackRock Global Business Intelligence data
through June 2024); see also ``Monthly Active ETF Monitor (August
31, 2025),'' J.P.Morgan, available at <a href="https://am.jpmorgan.com/content/dam/jpm-am-aem/americas/us/en/insights/etf-insights/monthly-active-etf.pdf">https://am.jpmorgan.com/content/dam/jpm-am-aem/americas/us/en/insights/etf-insights/monthly-active-etf.pdf</a> (``Over 37% of ETF flows in 2025 have gone into
active strategies'').
\25\ See ``2025 ETF & ETP Market Trends: Flow and Tell year in
review,'' BlackRock, available at <a href="https://www.ishares.com/us/insights/2025-etf-market-trends-record-flows">https://www.ishares.com/us/insights/2025-etf-market-trends-record-flows</a>.
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\26\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\27\ 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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\26\ 15 U.S.C. 78f(b).
\27\ 15 U.S.C. 78f(b)(5).
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The proposed rule change is designed to perfect the mechanism of a
free and open market, and, in general to protect investors and the
public interest because it would facilitate the listing and trading of
additional Commodity-Based Trust Shares, which would enhance
competition among market participants, to the benefit of investors and
the marketplace.
As discussed above, the Exchange is requiring at least 85% of the
NAV of the Trust's holdings to be composed of assets that already
qualify under the GLS (i.e., cash, cash equivalents, as well as
commodities, commodity-based assets, and securities that meet the
eligibility criteria in Rule 5711(d)(iv)). By requiring that the
primary exposure of Commodity-Based Trust Shares be in assets meeting
established eligibility criteria under this Rule, the Exchange believes
that its proposal will ensure flexibility for product innovation while
maintaining robust investor protections. As discussed above, these
eligibility criteria are generally designed to ensure that the Exchange
can obtain information regarding trading in the assets held by the
Trust issuing the Commodity-Based Trust Shares. This, in turn, would
assist in monitoring the trading in such Shares on the Exchange and to
deter and detect violations of Exchange rules and applicable federal
securities laws, thereby making Commodity-Based Trust Shares less
readily susceptible to fraud and manipulation.
The Exchange also believes it is consistent with the Act to add the
definition of digital commodity in the GLS, and to clearly delineate
that the proposed 15% buffer could only include digital commodities
that do not meet the GLS eligibility criteria as well as securities
that do not meet the GLS eligibility criteria. As discussed above, this
approach provides appropriate specificity as to the types of assets
that may be included in the buffer, while maintaining flexibility for
product innovation. With novel products that were not contemplated at
the time of adoption, the Exchange may submit an individual 19b-4 rule
filing to seek the listing and trading of such Commodity-Based Trust
Shares if it determines to do so at a later date.
The Exchange also believes that the proposed expansion of the GLS
to allow for actively-managed Commodity-Based Trust Shares is
consistent with the Act. The Exchange notes that the Commission
recently approved an individual 19b-4 for the listing and trading of an
actively-managed Commodity-Based Trust Share under Rule 5711(d).\28\ In
the iShares Approval Order, the Commission found that the requirements
under Rule 5711(d), coupled with the additional firewall and trading
halt representations made by the Exchange regarding the listing and
trading of the actively-managed product, were designed to prevent
fraudulent and manipulative acts and practices and to protect investors
and the public interest consistent with Section 6(b)(5) of the Act.\29\
Notably, the Commission cited a prior approval order where it had
stated in the context of ETFs that ``the mere addition of active
management to a portfolio that would otherwise qualify for generic
listing as an index-based ETF should not affect the portfolio's
susceptibility to manipulation or the availability of arbitrage between
the ETF and its underlying portfolio.'' \30\ The
[[Page 36190]]
Exchange agrees with the Commission when it stated that this principle
holds true for Commodity-Based Trust Shares as well,\31\ and believes
that the proposed amendments to the GLS to permit actively-managed
Commodity-Based Trust Shares are therefore consistent with the Act.
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\28\ See Securities Exchange Act Release No. 105582 (May 29,
2026), 91 FR 33252 (June 3, 2026) (SR-NASDAQ-2025-085) (Order
Granting Accelerated Approval of a Proposed Rule Change, as Modified
by Amendment No. 1 Thereto, to List and Trade Shares of the iShares
Bitcoin Premium Income ETF under Nasdaq Rule 5711(d) (Commodity-
Based Trust Shares)) (``iShares Approval Order'').
\29\ See iShares Approval Order at 33253.
\30\ See iShares Approval Order at 33253 (citing to Securities
Exchange Act Release Nos. 78396 (July 22, 2016), 81 FR 49698, 49702
(July 28, 2016) (SR-BATS-2015-100) (Order Approving Generic Listing
Standards for Managed Fund Shares); and 78397 (July 22, 2016), 81 FR
49320, 49324-25 (July 27, 2016) (SR-NYSEArca-2015-110) (Order
Approving Generic Listing Standards for Managed Fund Shares)).
\31\ See iShares Approval Order at 33253.
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As discussed above, the Exchange is adopting safeguards around
trading halts and material-non public information that are already in
place for other actively-managed products listed and trading on the
Exchange today.\32\ Further, these actively-managed Commodity-Based
Trust Shares would be subject to the same requirements under the GLS
that are currently applicable to passively-managed strategies,
including requirements related to portfolio transparency, valuation,
and dissemination. As the Commission stated in the GLS Approval Order,
consistently applying listing standards across products with economic
exposures to the same underlying commodities levels the playing field
between issuers, which should promote competition and would more
readily afford investors greater investment options.\33\ The Exchange
believes that extending the GLS to accommodate actively-managed
strategies would further this objective by enabling additional issuers
to bring innovative products to market through a transparent, regulated
framework.
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\32\ See supra notes 18 and 20.
\33\ See GLS Approval Order at 45419.
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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 not necessary or appropriate in
furtherance of the purposes of the Act. Instead, the Exchange believes
that the proposed rule change would facilitate the listing and trading
of additional types of Commodity-Based Trust Shares pursuant to generic
listing standards, provided that the applicable requirements are
satisfied. Accordingly, the proposal is designed to facilitate product
innovation and efficient listing processes, thereby enhancing
competition among issuers and listing venues, to the benefit of
investors and the marketplace.
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. Notice of Designation of a Longer Period for Commission Action
Section 19(b)(2) of the Act \34\ provides that within 45 days of
the publication of notice of the filing of a proposed rule change, or
within such longer period up to 90 days as the Commission may designate
if it finds such longer period to be appropriate and publishes its
reasons for so finding or as to which the self-regulatory organization
consents, the Commission shall either approve the proposed rule change,
disapprove the proposed rule change, or institute proceedings to
determine whether the proposed rule change should be disapproved. The
45th day after publication of the notice for this proposed rule change
is June 12, 2026. The Commission is extending this 45-day time period.
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\34\ 15 U.S.C. 78s(b)(2).
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The Commission finds it appropriate to designate a longer period
within which to take action on the proposed rule change so that it has
sufficient time to consider the proposed rule change and the issues
raised therein. Accordingly, the Commission, pursuant to Section
19(b)(2) of the Act,\35\ designates July 27, 2026, as the date by which
the Commission shall either approve or disapprove, or institute
proceedings to determine whether to disapprove, the proposed rule
change, as modified by Amendment No. 1.
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\35\ 15 U.S.C. 78s(b)(2).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change, as modified by Amendment No. 1, 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#cab8bfa6afe7a9a5a7a7afa4beb98ab9afa9e4ada5bc"><span class="__cf_email__" data-cfemail="acded9c0c981cfc3c1c1c9c2d8dfecdfc9cf82cbc3da">[email protected]</span></a>. Please include
file number SR-NASDAQ-2026-032 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-2026-032. 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-2026-032 and should be submitted
on or before July 7, 2026.
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\36\ 17 CFR 200.30-3(a)(12) and (31).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\36\
Vanessa A. Countryman,
Secretary.
[FR Doc. 2026-12037 Filed 6-15-26; 8:45 am]
BILLING CODE 8011-01-P
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