SEC Clears Nasdaq ISE to List Options on Wider Range of Crypto Funds

The SEC approved a Nasdaq ISE rule change that lets the exchange list options on crypto funds holding up to 15% of their assets in coins that lack a surveilled derivatives market, according to an order published in the Federal Register on Friday.

The change matters most for multi-coin funds. Under the old ISE rule, every crypto asset in a fund had to underlie a derivatives contract on a market that shares surveillance data with the exchange. A fund holding even one coin without such a market did not qualify.

What an option on a fund is

An option gives the buyer the right, but not the duty, to buy or sell fund shares at a set price by a set date. Traders use them to hedge or to bet on moves. For an exchange to list them, the underlying fund must meet listing criteria meant to guard against manipulation.

What changed and what stayed

The SEC's Division of Trading and Markets, acting under delegated authority, approved the change on an accelerated basis in an order dated Nov. 10. The new ISE criteria:
- Allow up to 15% of a fund's net asset value, in total, in digital commodities without a surveillance-sharing derivatives market (derivatives counted at gross notional value).
- Keep a $700 million minimum average daily market value, over 12 months, for each coin's global supply.
- Swap the term "crypto asset" for "digital commodity," matching a Nasdaq listing rule the SEC approved in July.

The order says the exchange will update that definition if Congress writes one into law. It also notes the SEC received no comments on the original filing. Comments on the final version are due Dec. 4, under file number SR-ISE-2026-42.

The order doesn't name any fund that will get options first.