Nasdaq proposes to drop information circular requirement for UTP derivatives
The change eliminates the need for Nasdaq members to receive a separate circular before trading UTP derivative securities, effective immediately upon filing.
On September 28, 2026, The Nasdaq Stock Market LLC filed a proposed rule change (Release No. 34-106625; File No. SR-NASDAQ-2026-085) that would delete Rule 5740(a)(1), which currently obligates the Exchange to distribute an information circular to Members prior to the commencement of trading in each UTP Derivative Security.
The filing also amends Rule 5740(a)(2) to require that any written description be provided in a form approved by the listing exchange or prepared by the open-ended management company issuing the securities, and that it be delivered no later than the confirmation of the first transaction in the series.
In addition, the proposal adds express cross-references to General 9, Section 10 and Equity 2, Section 20, replaces the cross-reference to Rule 4630 with Equity 10, Section 8, and specifies Equity 4 for Rule 4120. Existing Rules 5740(a)(2) through (5) would be renumbered as Rules 5740(a)(1) through (4).
The notice, published in the Federal Register Vol. 91, No. 196 on October 13, 2026 (FR Doc No. 2026-20800), states that the proposed rule change is effective immediately, and the Commission is soliciting comments from interested persons.
The Exchange notes that the proposal mirrors a similar filing by Cboe BZX Exchange, Inc. (see Securities Exchange Act Release No. 105715, June 17, 2026).
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