Key Takeaways
- The meeting focused on refining Nasdaq Rule 5711(d), crucial for the listing of commodity-based trust shares on Nasdaq.
- Discussions revolved around compliance measures and surveillance mechanisms in the crypto sector
In a bid to secure approval for a spot Bitcoin exchange-traded fund (ETF), financial juggernauts BlackRock and Nasdaq, in conjunction with the United States Securities and Exchange Commission (SEC), convened for a second round of talks. This recent meeting focused on refining Nasdaq Rule 5711(d), crucial for the listing of commodity-based trust shares on Nasdaq.
The comprehensive discussions revolved around compliance measures, surveillance mechanisms, and the intricate regulatory criteria outlined in Nasdaq Rule 5711(d). This rule is pivotal for maintaining market integrity and safeguarding users against potential fraud in the ever-expanding cryptocurrency market.
The latest discussions come on the heels of a November 20 meeting where BlackRock and Nasdaq engaged with the SEC to propose a rule facilitating the listing of a spot Bitcoin ETF. During this initial meeting, BlackRock presented a detailed overview of potential redemption models, be it in-kind or in-cash, for the iShares Bitcoin Trust.
A published memo detailing the recent meeting highlights its focus on “The NASDAQ Stock Market LLC’s proposed rule change to list and trade shares of the iShares Bitcoin Trust under Nasdaq Rule 5711(d).”
A key aspect of Nasdaq Rule 5711(d) is its insistence on including a surveillance-sharing agreement. This strategic addition aims to address the SEC’s concerns about market manipulation risks within the crypto trading sphere.
BlackRock’s November presentation included insights into two redemption models— in-kind and in-cash—providing the SEC with a comprehensive understanding of their proposed ETF structure. Subsequently, BlackRock filed an updated proposal that introduces cash creation and redemption mechanisms, aligning with SEC preferences.
This shift in approach is reflective of an industry-wide trend where asset management firms are modifying their proposals amid speculation that the SEC might approve several spot Bitcoin ETF applications in the upcoming year. This anticipation is bolstered by the broader trend of increased mainstream adoption of cryptocurrency investments.
In a significant development earlier this week, BlackRock officially named its proposed spot Bitcoin ETF with the ticker IBIT, as per an amended S-1 filing. This updated filing not only provides clarity on the ETF’s creation and redemption mechanism but also signals a strategic move by BlackRock to position itself favorably within the evolving regulatory landscape.
