The world’s largest asset manager, BlackRock, reportedly met with the U.S. Securities and Exchange Commission (SEC) and Nasdaq to discuss listing rules for spot Bitcoin exchange-traded funds (ETFs).
During the second meeting in December between BlackRock, Nasdaq, and the SEC, discussions focused on Nasdaq’s proposed rule change allowing the listing and trading of a spot Bitcoin ETF under Nasdaq Rule 5711(d).
A memo from the SEC indicated that representatives from the three organizations discussed the necessary rule changes for listing a spot Bitcoin ETF on Nasdaq.
The SEC wrote: “The discussion concerned The NASDAQ Stock Market’s proposed rule change to list and trade shares of the iShares Bitcoin Trust under NASDAQ Rule 5711(d).”
Nasdaq Rule 5711(d) outlines requirements for listing commodity-based trust shares on Nasdaq, including the necessity for such shares to represent interests in a commodity trust holding “physical” commodities or cash-settled commodity-linked derivatives. The rule also mandates compliance with specific listing standards, such as minimum distribution requirements and a minimum of 100 round lot holders.
In addition to Nasdaq Rule 5711(d) requirements, the rule sets regulatory guidelines and specific criteria for listing, including compliance with securities laws and listing on a “regulated market.” The rule also incorporates provisions for surveillance mechanisms to detect fraud, manipulation, and other abuses.
The discussion on listing rules for spot Bitcoin ETFs is part of ongoing engagements by the SEC, which previously discussed the topic in November 2022 when BlackRock and Nasdaq met with the SEC.
During the meeting, BlackRock presented a redemption model for its iShares Bitcoin Trust, outlining the trust’s ability to redeem shares in cash or in kind, either by selling bitcoin and delivering proceeds or delivering bitcoin directly to redeeming shareholders.
On December 14, the SEC conducted further discussions with asset managers, including Fidelity, regarding proposed rules for listing spot Bitcoin ETFs.
Reports suggest that representatives from SEC Chair Gary Gensler’s office attended the meeting to discuss the proposed rule change for listing spot Bitcoin ETFs.
