On 3 March 2025, the United States Securities and Exchange Commission (US SEC) published a notice regarding a proposed rule change submitted by The Nasdaq Stock Market LLC (Nasdaq). The document, titled “Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 1, to Adopt Nasdaq Rule 5712 to Provide for the Listing and Trading of Commodity- and Digital Asset-Based Investment Interests and to List and Trade Shares of the Hashdex Nasdaq Crypto Index US ETF under Proposed Nasdaq Rule 5712,” was published under Release No. 34-102513; File No. SR-NASDAQ-2025-016.
The rule change originates from a filing made by Nasdaq on 18 February 2025, seeking approval under United States Securities Exchange Act of 1934, Section 19(b)(1) and Rule 19b-4. It was later modified by Amendment No. 1 on 27 February 2025, which replaced the original filing entirely. The purpose of the rule change is to establish a framework under which Commodity- and Digital Asset-Based Investment Interests—securities backed by digital assets, commodities, and derivatives—can be listed and traded. Under this rule, Nasdaq also seeks approval to list and trade shares of the Hashdex Nasdaq Crypto Index US ETF under the new Nasdaq Rule 5712.
The proposal introduces specific listing requirements for these investment interests, defining them as securities issued by trusts, limited liability companies, or similar entities holding commodities, digital assets, derivatives, and cash. The Nasdaq Rule 5712 applies to Commodity- and Digital Asset-Based Investment Interests, which are securities issued by a trust, limited liability company, or similar entity. These securities are backed by commodities, digital assets, derivatives, and/or cash, providing investors with exposure to a diversified range of assets. The framework aims to align these investment products with existing regulations governing similar exchange-traded products.
To ensure market stability, Nasdaq Rule 5712 REQUIRES at least 90% of the holdings in any listed fund must be in assets that are subject to oversight through the Intermarket Surveillance Group (ISG) or a Comprehensive Surveillance Sharing Agreement (CSSA). All listed securities must meet specific minimum trading standards whichincludes maintaining at least 50,000 securities outstanding, with a total market value of at least $1 million. After the first 12 months of trading, the fund must also have at least 50 holders to remain compliant with listing rules.
Under Nasdaq Rule 5712, it requires that the value of the underlying assets be updated every 15 seconds to ensure transparency and accurate pricing. Market makers must also report their trading activity to the exchange, allowing for continuous oversight. If any of these listing requirements are not met, Nasdaq has the authority to suspend trading or initiate delisting proceedings. The rule also stipulates stringent listing and continued compliance requirements, including mandatory minimum outstanding securities, liquidity thresholds, and reporting obligations to maintain transparency in digital asset investments.
The United States SEC had approved the listing of Hashdex Nasdaq Crypto Index US ETF under Nasdaq Rule 5711(d) on 19 December 2024, and the current proposal seeks to amend its investment strategy and reclassify it under Nasdaq Rule 5712. If approved, this transition aims to facilitate a more structured regulatory framework for such investment products. The proposal will also need to aligns with United States Commodity Exchange Act, Section 1a (9), ensuring compliance with commodity definitions and exchange standards.
As the US SEC reviews this proposal, it invites public comments to assess the potential impact of this regulatory update.
(Source: https://www.sec.gov/files/rules/sro/nasdaq/2025/34-102513.pdf)
