Nasdaq Pushes New Rule for Crypto and Commodity ETF Trading
Published Date: 3/7/2025
Notice
Summary
Nasdaq is rolling out a new rule to let people buy and sell investment products based on commodities and digital assets, like cryptocurrencies. They’re also launching the Hashdex Nasdaq Crypto Index US ETF, a new crypto-focused fund. This change opens fresh trading options for investors and could start soon after the SEC reviews it.
Analyzed Economic Effects
6 provisions identified: 3 benefits, 2 costs, 1 mixed.
New Nasdaq Rule Lets You Buy Crypto ETPs
Nasdaq proposed Rule 5712 would allow listing and trading of Commodity- and Digital Asset-Based Investment Interests on the exchange, and would permit the Hashdex Nasdaq Crypto Index US ETF (ticker NCIQ) to be listed and traded under that rule. If you invest, this creates a new publicly traded fund that gives price exposure to a basket of digital assets via exchange-listed shares.
Delisting Triggers for Crypto Investment Shares
Proposed Rule 5712 allows Nasdaq to halt trading or initiate delisting if, after the initial 12-month period, the fund has fewer than 50 record/beneficial holders for more than 60 days, fewer than 50,000 securities outstanding, or a market value of outstanding shares below $1,000,000. Those thresholds create specific liquidity and size tests that could lead to removal from the exchange.
Hashdex ETF Holds Spot Crypto, No Staking Income
The Hashdex Nasdaq Crypto Index US ETF (the Trust) gains exposure by buying spot digital assets and may keep cash only for expenses; it will not invest in tokenized assets or stablecoins and, unless the SEC permits, neither the Trust nor its service providers will engage in staking or otherwise seek to earn income from held assets. The Trust will also irrevocably abandon incidental rights from forks or airdrops.
Index Rules Decide Which Crypto Are Included
The Trust tracks the Nasdaq Crypto Settlement Price Index (NCIS), whose quarterly reconstitutions occur on the first business day in March, June, September, and December. To be eligible for inclusion a crypto asset must (among other things) trade on at least two Core Crypto Platforms since the previous reconstitution, be supported by at least one Core Custodian, have median daily USD volume of at least 0.5% of the highest-volume asset, and be eligible for ETP listing on SIX Swiss Exchange and Deutsche Börse Xetra 30 calendar days prior to inclusion.
Pricing and Data Transparency Requirements
Proposed Rule 5712 requires that the value of underlying commodities/digital assets and the intraday indicative value be available at least on a 15-second delayed basis; Nasdaq may halt trading or initiate delisting if these data are not available. The Index's settlement prices are calculated each business day using a TWAP of per-minute VWAPs between 3:50:00 and 4:00:00 p.m. New York time, with the Index calculated at 4:05 p.m.
Surveillance Requirement: 90% Eligible Assets
Under proposed Rule 5712 at least 90% of a Fund's weight must, on both an initial and continuing basis, consist of commodities and/or digital assets for which Nasdaq can obtain information via the Intermarket Surveillance Group (ISG) or a comprehensive surveillance sharing agreement (CSSA). This aims to ensure most of a listed fund's holdings are subject to surveillance shared with the Exchange.
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