I. Introduction

On February 18, 2025, The Nasdaq Stock Market LLC (“Exchange” or “Nasdaq”) 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 adopt new Nasdaq Rule 5712 to provide for the listing and trading of Commodity- and/or Digital Asset-Based Investment Interests and to list and trade shares (“Shares”) of the Hashdex Nasdaq Crypto Index US ETF (“Trust”) under proposed Nasdaq Rule 5712. On February 27, 2025, the Exchange filed Amendment No. 1 to the proposed rule change, which replaced and superseded the original filing in its entirety. The proposed rule change, as modified by Amendment No. 1, was published for comment in the Federal Register on March 7, 2025.^[3]

On April 17, 2025, pursuant to Section 19(b)(2) of the 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, as modified by Amendment No. 1.^[5] This order institutes proceedings under Section ( printed page 24442) 19(b)(2)(B) of the Act ^[6] to determine whether to approve or disapprove the proposed rule change, as modified by Amendment No. 1.

II. Summary of the Proposal, as Modified by Amendment No. 1

A. Proposed Listing Standards for Commodity- and/or Digital Asset-Based Investment Interests

As described in more detail in the Notice,^[7] the Exchange proposes to adopt new Nasdaq Rule 5712 to provide for the listing and trading of Commodity- and/or Digital Asset-Based Investment Interests. Proposed Nasdaq Rule 5712(c)(1) defines “Commodity- and/or Digital Asset-Based Investment Interests” to mean “a security (a) that is issued by a trust, limited liability company, or other similar entity (the `Fund') that holds (1) specified commodities and/or digital assets deposited with the Fund, or (2) specified commodities and/or digital assets and, in addition to such specified commodities and/or digital assets, derivative securities products ^[8] deposited with the Fund and/or cash; (b) that is issued by such Fund in a specified aggregate minimum number in return for a deposit of a quantity of the underlying commodity(ies), digital asset(s), derivative securities products, and/or cash; and (c) that, when aggregated in the same specified minimum number, may be redeemed at a holder's request by such Fund which will deliver to the redeeming holder the quantity of the underlying commodity(ies), digital asset(s), derivative securities products, and/or cash.” ^[9]

Proposed Nasdaq Rule 5712(c)(2) states that “commodity,” for purposes of this rule, “means commodities as defined in Section 1a(9) of the Commodity Exchange Act.” ^[10] Proposed Nasdaq Rule 5712(c)(3) defines the term “digital asset,” for purposes of this rule, to mean “any digital representation of value recorded on a cryptographically secured, distributed ledger ( i.e., blockchain) or similar technology.” ^[11]

Proposed Nasdaq Rule 5712 sets forth certain listing requirements specific to Commodity- and/or Digital Asset-Based Investment Interests, as described in more detail in the Notice and Exhibit 5 thereto.^[12] Among other things, proposed Nasdaq Rule 5712(e)(1)(ii) would provide that there shall be no limitation on the percentage of a Fund's portfolio that may be invested in commodity and/or digital asset holdings, “except that, in the aggregate, at least 90% of the weight of such holdings shall, on both an initial and continuing basis, consist of commodities and/or digital assets concerning which the Exchange is able to obtain information via the Intermarket Surveillance Group (`ISG') from other members of the ISG or via a comprehensive surveillance sharing agreement.” ^[13]

The Exchange also proposes to amend Nasdaq Rule 5615(a)(6)(B) (Exemptions from Certain Corporate Governance Requirements) to include Commodity- and/or Digital Asset-Based Investment Interests in the definition of “Derivative Securities,” the issuers of which are exempt from certain enumerated corporate governance requirements.^[14] In addition, the Exchange proposes to amend its existing trading halt rules related to exchange-traded products (“ETPs”) to add references to Commodity- and/or Digital Asset-Based Investment Interests to make clear that such products will be subject to those rules.^[15]

B. Hashdex Nasdaq Crypto Index US ETF

As described in more detail in the Notice,^[16] the Exchange also proposes to list and trade Shares of the Trust under proposed Nasdaq Rule 5712.^[17]

According to the Exchange, the investment objective of the Trust will be to ensure that the daily changes in the NAV of the Shares correspond to the daily changes in the price of the Nasdaq Crypto Settlement Price Index (“Index”),^[18] less expenses and liabilities of the Trust, by investing in the digital asset constituents of the Index (“Index Constituents”).^[19] The assets of the Trust will consist of the Index Constituents, cash, and cash equivalents.^[20] The weighting of each Index Constituent in ( printed page 24443) the Trust's portfolio is generally expected to match the weighting of the Index Constituents in the Index,^[21] except when the Sponsor determines to exclude or limit the weight of one or more digital assets from the Trust's portfolio in certain rules-based circumstances, in which case the weightings of the digital assets held by the Trust are generally expected to be calculated proportionally to the respective Index Constituents for the remaining Index Constituents.^[22] As of the date of the filing, the Index Components and their weightings were as follows: ^[23]

For purposes of calculating NAV, the Administrator will value the digital assets held by the Trust based on the settlement price of each Index Constituent (“Index Constituent Settlement Price”),^[24] unless the Index Constituent Settlement Price is not available or the Administrator determines that the Index Constituent Settlement Price is unreliable.^[25] The Trust will issue and redeem Shares in cash with authorized participants on a continuous basis in one or more “Baskets” of 10,000 Shares.^[26]

III. Proceedings To Determine Whether To Approve or Disapprove SR-NASDAQ-2025-016 and Grounds for Disapproval Under Consideration

The Commission is instituting proceedings pursuant to Section 19(b)(2)(B) of the Act ^[27] to determine whether the proposed rule change, as modified by Amendment No. 1, should be approved or disapproved. Institution of proceedings is appropriate at this time in view of the legal and policy issues raised by the proposed rule change. Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved. Rather, the Commission seeks and encourages interested persons to provide comments on the proposed rule change.

Pursuant to Section 19(b)(2)(B) of the Act,^[28] the Commission is providing notice of the grounds for disapproval under consideration. The Commission is instituting proceedings to allow for additional analysis of the proposed rule change's consistency with Section 6(b)(5) of the Act, which requires, among other things, that the rules of a national securities exchange be “designed to prevent fraudulent and manipulative acts and practices” and “to protect investors and the public interest.” ^[29]

The Commission asks that commenters address the sufficiency of the Exchange's statements in support of the proposal, which are set forth in the Notice, in addition to any other comments they may wish to submit about the proposed rule change. In particular, with respect to the proposal to allow the listing and trading of Commodity- and/or Digital Asset-Based Investment Interests on the Exchange, the Commission seeks comment on whether the requirements and associated definitions set forth in proposed Nasdaq Rule 5712 are sufficiently clear. The Commission also seeks comment on whether the proposal to list and trade Shares of the Trust, which would hold BTC, ETH, SOL, XRP, ADA, LINK, AVAX, LTC, and UNI, and potentially other commodities, digital assets, and/or derivative securities products, is designed to prevent fraudulent and manipulative acts and practices or raises any new or novel concerns not previously contemplated by the Commission.

IV. Procedure: Request for Written Comments

The Commission requests that interested persons provide written submissions of their views, data, and arguments with respect to the issues identified above, as well as any other concerns they may have with the proposal. In particular, the Commission invites the written views of interested persons concerning whether the proposal, as modified by Amendment No. 1, is consistent with Section 6(b)(5) or any other provision of the Act, and the rules and regulations thereunder. Although there do not appear to be any issues relevant to approval or disapproval that would be facilitated by an oral presentation of views, data, and arguments, the Commission will consider, pursuant to Rule 19b-4, any request for an opportunity to make an oral presentation.^[30]

Interested persons are invited to submit written data, views, and arguments regarding whether the proposed rule change, as modified by Amendment No. 1, should be approved or disapproved by July 1, 2025. Any person who wishes to file a rebuttal to any other person's submission must file that rebuttal by July 15, 2025.

Comments may be submitted by any of the following methods:

Electronic Comments

• Use the Commission's internet comment form (https://www.sec.gov/​rules/​sro.shtml); or
• Send an email torule-comments@sec.gov. Please include file number SR-NASDAQ-2025-016 on the subject line.

Paper Comments

• 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-2025-016. 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 ( https://www.sec.gov/​rules/​sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission's Public Reference Room, 100 F Street NE, Washington, DC 20549, on official ( printed page 24444) business days between the hours of 10 a.m. and 3 p.m. Copies of the filing also 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-2025-016 and should be submitted on or before July 1, 2025. Rebuttal comments should be submitted by July 15, 2025.