SEC Extends Review Period for Nasdaq ISE Rule Change on Bitcoin Options
Commentary by Steven Lofchie
The SEC designated a longer time period to take action on a proposed rule change filed by Nasdaq ISE regarding position and exercise limits for options on the iShares Bitcoin Trust ETF ("IBIT").
According to the Notice, the Exchange proposed to increase position and exercise limits for IBIT options. Nasdaq ISE subsequently filed Amendment No. 1, which superseded the original proposal in its entirety, specifically to remove changes related to FLEX Options trading rules. The proposed rule change was filed pursuant to Section 19(b)(1) ("Registration, responsibilities, and oversight of self-regulatory organizations") of the SEA.
The SEC determined it appropriate to designate a longer period to ensure it has sufficient time to consider the proposed rule change. While the standard 45-day review period was set to expire on January 10, 2026, the Commission exercised its authority under Section 19(b)(2) of the Act to extend the deadline.
Consequently, the regulator established February 24, 2026, as the date by which it must either approve, disapprove, or institute proceedings regarding the proposal.
Commentary
It is an open question as to how aggressive the SEC will be in allowing the exchanges to engage with publicly traded products, such as highly leveraged ETFs.