SEC Approves Nasdaq ISE Options on Digital Commodity ETPs, Opening Listed Options Beyond Bitcoin and Ether

Published November 11, 2026, 11:45 AM PKT. Based on the U.S. Securities and Exchange Commission order, Release No. 34-106863 (primary source), and reporting by Genfinity (secondary source).

The U.S. Securities and Exchange Commission (SEC) approved a Nasdaq ISE rule change on November 10, 2026, that lets the options exchange list options on exchange-traded products holding digital commodities, extending listed crypto options beyond Bitcoin ($BTC) and Ethereum ($ETH) for the first time under a single standing rule.

The order, Release No. 34-106863, grants accelerated approval to rule filing SR-ISE-2026-42, as modified by Amendment No. 2. It landed one day before the November 11, 2026 deadline the SEC had set for itself in September, when it designated a longer review period under Section 19(b)(2) of the Securities Exchange Act.

Under the new rule, Nasdaq ISE can list options on a qualifying commodity-based trust without returning to the SEC for a separate approval for each new product. Until now, options on crypto exchange-traded products reached the market one filing at a time.

A rule filed in July, decided a day early

Nasdaq ISE filed the proposal on July 28, 2026, and the SEC published it for comment in the Federal Register on August 13, 2026. The Commission received no public comments on the filing, the order states.

On September 21, 2026, the SEC used the longer review window in Section 19(b)(2) and designated November 11, 2026 as the date by which it had to approve, disapprove, or open proceedings on the proposal. The exchange then filed Amendment No. 1 on November 3, withdrew it on November 5, and submitted Amendment No. 2 the same day, replacing the original filing in its entirety. The SEC approved the proposal as modified by Amendment No. 2 on an accelerated basis, the order states.

Amendment No. 2 added several safeguards and clarifications. The exchange represented that it will file to conform its definition of digital commodity if legislation defines the term, that derivatives held by a trust will count toward the 15 percent buffer on their gross notional value, and that it can obtain information directly from Nasdaq to investigate suspected manipulation or other trading abuse involving the options. The amendment also describes continued listing requirements, surveillance procedures, trading rules, and systems capacity, including the Options Price Reporting Authority's ability to handle the additional traffic.

What counts as a digital commodity

The rule replaces the broad term "crypto asset" in ISE's Options 4, Section 3(h) with the narrower legal term "digital commodity." Under Nasdaq Rule 5711(d)(iii)(D), a digital commodity is a commodity that is a digital asset, intrinsically linked to and deriving its value from the programmatic operation of a functional crypto system and from supply and demand, rather than from the expectation of profits from the essential managerial efforts of others, the order states.

The definition follows the joint interpretive guidance the SEC and the Commodity Futures Trading Commission issued, effective March 23, 2026, and it mirrors the companion Nasdaq listing rule the SEC approved on July 27, 2026, in the SR-NASDAQ-2026-032 order, Release No. 105995, which amended Nasdaq Rule 5711(d) for commodity-based trust shares.

The distinction matters because not every crypto asset qualifies. The old term covered anything generated, issued, or transferred on a blockchain that relies on cryptographic protocols. The new term adds an economic test: the asset must draw its value from a working crypto system and market forces, not from someone else's managerial work.

The $700 million and 85 percent tests

A trust must pass two numeric tests before ISE can list options on it. Each digital commodity in the trust needs an average daily market value of at least $700 million over the prior 12 months, and at least 85 percent of the trust's net asset value must sit in assets that underlie derivatives contracts traded on a market with which ISE has a comprehensive surveillance sharing agreement, directly or through common membership in the Intermarket Surveillance Group, the order states.

Up to 15 percent of a trust's net asset value may fall outside the surveillance test, though those holdings still have to clear the $700 million market value bar. ISE told the SEC it holds surveillance sharing arrangements with CME and Coinbase Derivatives through the Intermarket Surveillance Group, according to Genfinity, and the order notes the exchange can obtain information from Nasdaq to investigate suspected manipulation.

The trust must also meet ISE's existing exchange-traded fund listing standards and disclose its holdings, net asset value method, and creation and redemption process.

The 19 assets in the SEC's view

The SEC and its staff have identified 19 assets as digital commodities, Genfinity reported, citing the SEC's interpretive release with the Commodity Futures Trading Commission, Release 33-11412, which took effect on March 23, 2026, and a November 3 staff no-action letter on Canton Coin ($CC).

The list, as reported, is: Bitcoin ($BTC), Bitcoin Cash ($BCH), Litecoin ($LTC), XRP ($XRP), and Stellar ($XLM) as store of value and payment networks; Ethereum ($ETH), Solana ($SOL), Avalanche ($AVAX), Cardano ($ADA), Polkadot ($DOT), Tezos ($XTZ), Aptos ($APT), and Algorand ($ALGO) as smart contract layer-1s; Hedera ($HBAR), Chainlink ($LINK), and Canton Coin ($CC) as enterprise and data infrastructure; and Dogecoin ($DOGE), Shiba Inu ($SHIB), and LBRY Credits ($LBC) as community and content assets.

The list illustrates the SEC's view and does not approve any specific product, Genfinity noted. A trust holding any of these assets still has to pass the liquidity and surveillance tests, and smaller assets on the list may need to grow before they can sit inside a qualifying trust, since the $700 million test applies to every asset in the trust, including the 15 percent buffer.

Why options come next for issuers

Options give institutional investors tools to hedge, generate income, and size positions precisely, and exchange-listed options trade on regulated venues with central clearing. ISE argued in its filing that listed options add competition and hedging choices for investors, Genfinity reported.

Demand is already visible in Bitcoin ($BTC) ETF options. ISE won approval to list options on BlackRock's iShares Bitcoin Trust, ticker IBIT, in September 2024, and the SEC later approved raising the IBIT position and exercise limit from 250,000 contracts to 1,000,000 contracts in an order dated April 27, 2026, Genfinity reported. The new rule lets the same exchange extend similar tools to exchange-traded products holding other digital commodities.

Product launches remain a separate step. Each exchange-traded product still needs its own listing under Nasdaq's standards, and options will follow only after a qualifying trust trades. Issuers will need to design trusts around the tests, and the list of digital commodities can still grow through new staff statements, as the Canton Coin ($CC) letter showed on November 3.

Sources

• U.S. Securities and Exchange Commission, Release No. 34-106863; File No. SR-ISE-2026-42; Notice of Filing of Amendment No. 2 and Order Granting Accelerated Approval, November 10, 2026 (primary source: accelerated approval of SR-ISE-2026-42 as modified by Amendment No. 2; filed July 28, 2026; Federal Register publication August 13, 2026, Release No. 106067; no comments received; longer period designated September 21, 2026 with a November 11, 2026 deadline, Release No. 106448; Amendment No. 1 filed November 3, 2026, withdrawn November 5, 2026, Amendment No. 2 submitted the same day; digital commodity definition at Nasdaq Rule 5711(d)(iii)(D); $700 million average daily market value test; 85 percent surveillance test; 15 percent buffer with derivatives counted at gross notional value; companion SR-NASDAQ-2026-032 approval July 27, 2026, Release No. 105995; joint SEC and CFTC interpretive guidance effective March 23, 2026)
• Genfinity, SEC Clears Nasdaq ISE to List Options on Digital Commodity ETPs, Extending Derivatives Beyond Bitcoin and Ether, November 10, 2026 (secondary source: 19 digital commodities identified by the SEC and SEC staff; ISE surveillance sharing arrangements with CME and Coinbase Derivatives through the Intermarket Surveillance Group; IBIT options approval September 2024; IBIT position and exercise limit raised from 250,000 to 1,000,000 contracts April 27, 2026; options as hedging and income tools for institutional investors)

This article is news reporting and is not investment advice.