Nasdaq ISE, one of the primary U.S. options exchanges, has filed a rule change with the U.S. Securities and Exchange Commission that, if approved, would allow the exchange to list options on crypto-backed exchange-traded funds using standardized criteria, eliminating the need for separate regulatory approval on each individual product.

The filing, designated SR-ISE-2026-42 and submitted on July 28, proposes a framework for options on "commodity-based trust shares that incorporate digital commodities." Under the proposed rule, qualifying crypto ETFs that meet specific benchmarks could launch options without requiring a product-specific SEC approval. The structure mirrors the generic listing standards that already govern options on gold, silver, and oil ETFs, which do not require individual review for each new fund.

Qualifying Thresholds

To be eligible, trusts would need to maintain a minimum of $700 million in average daily global market value for each digital commodity they hold.

The proposal also includes a surveillance component. Derivatives tied to a trust's underlying holdings must trade on a market monitored by an Intermarket Surveillance Group (ISG) member, covering at least 85% of the trust's net asset value. The ISG is a cross-market organization through which exchanges and regulators share surveillance data to detect manipulative activity, and membership in it is a longstanding SEC benchmark for assessing whether an options market's underlying assets are adequately monitored. The remaining 15% receives a partial exemption, meaning assets without comprehensive surveillance agreements would not automatically disqualify a trust, provided they remain a minority of the overall portfolio.

This 85/15 structure would allow a multi-asset crypto ETF to maintain dominant positions in Bitcoin and Ethereum—both of which trade on well-surveilled venues—while allocating a smaller portion to assets such as Solana, which may have less robust surveillance infrastructure. The filing explicitly references the possibility of options on products containing Bitcoin, Ethereum, and Solana, among other digital assets.

Position Limits and Legislative Context

In January 2026, Nasdaq removed the 25,000-contract position limits on Bitcoin and Ethereum ETF options, a change that enabled larger institutional positions in those products. Those options had begun trading after the SEC approved spot Bitcoin ETFs in January 2024 and spot Ethereum ETFs later that year, establishing the regulatory pathway on which the current proposal builds.

The regulatory landscape also remains affected by congressional inaction. The Digital Asset Market Clarity Act, commonly referred to as the CLARITY Act, was intended to delineate jurisdictional authority between the SEC and the Commodity Futures Trading Commission over digital assets. Although updated legislative texts have circulated, the Senate has not reached a resolution. As of late July 2026, the bill remained stalled in negotiations. The absence of a comprehensive federal framework has left exchanges like Nasdaq ISE to pursue incremental rule changes that expand crypto derivatives access within the SEC's existing securities-law authority.

Implications for the Options Market

If the SEC approves the rule change, the primary effect would be operational speed. Under the current framework, each new crypto ETF option requires its own filing, review period, and approval—a process that can take months and creates a bottleneck that does not exist for gold, silver, or oil ETF options.

The $700 million market value threshold would also give ETF sponsors a concrete benchmark to target for streamlined options listings. Sponsors of emerging digital commodity ETFs would have a clear path to options eligibility once their products reach sufficient scale, potentially accelerating the development of listed derivatives for assets beyond Bitcoin and Ethereum.

The 15% surveillance flexibility has drawn attention as a potential risk dimension, as it would permit a portion of certain trusts' holdings to reside in less-monitored markets. The SEC's comment period on the filing is expected to address whether that carve-out is appropriately calibrated. The outcome of that review, along with any conditions the SEC may impose, will signal how much structural flexibility regulators are willing to grant for multi-asset crypto derivatives going forward.