On 10 June 2025, the United States Securities and Exchange Commission (US SEC) published an order instituting proceedings to determine whether to approve or disapprove a proposed rule change, as modified by Amendment No. 1, submitted by The Nasdaq Stock Market LLC for the listing and trading of the Canary HBAR ETF under Nasdaq Rule 5711(d), which governs commodity-based trust shares. The rule change is filed under docket number SR-NASDAQ-2025-018.
The original proposal was filed on 21 February 2025 pursuant to Section 19(b)(1) of the United States Securities Exchange Act of 1934 and United States Rule 19b-4. On 4 March 2025, Nasdaq submitted Amendment No. 1, which replaced the original filing in full. The proposal was published in the Federal Register on 13 March 2025. On 24 April 2025, the US SEC extended its decision-making timeline, and through this order, formally commenced proceedings under Section 19(b)(2)(B) of the Act.
According to the modified proposal, the Canary HBAR ETF seeks to provide exposure to the value of Hedera (HBAR), the native digital asset of the Hedera Network, less the expenses and liabilities of the trust. The trust would hold only HBAR and cash, with net asset value determined by the CoinDesk Hedera USD CCIX 30min NY Rate, calculated from aggregated executed trade flows across major HBAR trading platforms. The ETF would permit creation and redemption of shares in blocks of 10,000, either in cash or in-kind. Canary Capital Group LLC is the sponsor, CSC Delaware Trust Company is the trustee, and digital asset custody will be jointly managed by BitGo Trust Company, Inc. and Coinbase Custody Trust Company, LLC.
The institution of proceedings does not indicate any conclusion as to whether the proposed rule change should be approved or disapproved and only allows for further analysis of whether the proposal complies with Section 6(b)(5) of the United States Securities Exchange Act of 1934, which requires that exchange rules be designed to prevent fraudulent and manipulative practices, protect investors, and serve the public interest.
The US SEC has called for public comments on whether the proposal adequately demonstrates that the listing of shares in a trust holding HBAR meets these statutory standards. It has also asked whether the use of the CoinDesk benchmark sufficiently addresses concerns of pricing reliability and resistance to market manipulation. Interested persons may submit written comments referencing file number SR-NASDAQ-2025-018 within the specified deadlines, with rebuttal comments due within 35 days after Federal Register publication.
(Source: https://www.sec.gov/files/rules/sro/nasdaq/2025/34-103217.pdf)
