The Securities and Exchange Commission issued a notice on November 3, 2025, extending the timelines for reviewing and acting on a series of proposed rule changes submitted by various self-regulatory organizations under Section 19(b) of the Securities Exchange Act of 1934. This action affects 28 proposals with extensions to the 90-day mark and four others to the 240-day limit, primarily due to the agency's shutdown starting October 1, 2025, caused by a lapse in appropriations. The extensions provide the SEC with additional time to assess complex issues in securities regulation, including innovations in trading tokenized assets, options on cryptocurrency-related products, and adjustments to clearing and settlement processes. This development underscores the regulatory challenges in balancing innovation with market integrity during periods of federal operational constraints.
Background on SEC Review Process
Under Section 19(b)(2) of the Securities Exchange Act, the SEC must approve, disapprove, or initiate proceedings on proposed rule changes within 45 days of publication in the Federal Register, with the option to extend to 90 days if deemed appropriate. For cases where proceedings are instituted, the timeline extends to 180 days, with a possible further 60-day extension to 240 days. The notice cites the need for sufficient time to consider the proposals and related issues, explicitly referencing the agency's closure since October 1, 2025, as noted in the SEC's operational status update. This shutdown has limited staff availability, impacting the Commission's ability to meet standard deadlines. The proposals stem from SROs such as Nasdaq, Cboe, ISE, and others, reflecting ongoing efforts to adapt rules to emerging market trends like digital assets and specialized financial products.
Key Proposals Extended to Day 90
The notice details 28 filings extended to Day 90, with decision dates ranging from December 18, 2025, to January 1, 2026. These cover a broad spectrum of regulatory adjustments. For instance, NASDAQ-2025-072 proposes enabling the trading of securities in tokenized form, published on September 22, 2025, in the Federal Register (90 FR 45426), with a new deadline of December 21, 2025. This filing aims to integrate blockchain technology into traditional exchange operations, potentially streamlining trading efficiency. Another notable proposal is PHLX-2025-50, which seeks to list and trade Nasdaq Bitcoin Index Options, published on September 29, 2025 (90 FR 46706), now extended to December 28, 2025. This reflects growing interest in cryptocurrency derivatives.
Several filings from Cboe entities address options trading enhancements. CBOE-2025-068, published on September 26, 2025 (90 FR 46424), proposes permitting p.m.-settled options on the Cboe Magnificent 10 Index, with a decision due by December 25, 2025. Similarly, multiple Nasdaq-related filings, such as NASDAQ-2025-080 through NASDAQ-2025-085, involve amendments to corporate governance documents and new ETF listings like the iShares Bitcoin Premium Income ETF, with deadlines extending into early 2026. The notice attributes these extensions to the need for careful review, as stated: 'The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule changes so that it has sufficient time to consider the proposed rule changes and the issues raised therein.' This grouping highlights themes of innovation in digital assets, options positioning, and clearing mechanisms, such as FICC-2025-021's new ACS Triparty Service for government securities.
Proposals Extended to Day 240 and Instituted Proceedings
For four proposals, the SEC has extended proceedings to Day 240, allowing up to January 24, 2026, for final decisions. These were subject to orders instituting proceedings (OIPs) due to their complexity or potential market impacts. CboeBZX-2025-059, involving the listing of 2x Long VIX Futures ETF and -1x Short VIX Futures ETF, had its OIP published on August 12, 2025 (90 FR 38864), with the extension justified by the need for deeper analysis of volatility-linked products. ISE-2025-15 proposes amending the Short Term Option Series Program to include Qualifying Securities, with its OIP on August 12, 2025 (90 FR 38832).
NASDAQ-2025-037 seeks to adopt rules for generic listing of Multi-Class Exchange-Traded Fund Shares, OIP published August 26, 2025 (90 FR 41611). Lastly, CboeBZX-2025-069 aims to list shares of the Canary Staked TRX ETF, a cryptocurrency-focused product, with its OIP on August 28, 2025 (90 FR 42050). The extensions invoke Section 19(b)(2)(B) of the Act, emphasizing the Commission's determination that additional time is necessary, again citing the shutdown's effects.
Legal and Political Context
These extensions occur against a backdrop of evolving securities regulation, influenced by precedents like the SEC's approvals of spot Bitcoin ETFs in early 2024, which set standards for cryptocurrency integration. Political forces, including congressional oversight of the SEC and debates over digital asset regulation, add layers of scrutiny. Perspectives vary: SROs may view delays as hindrances to market innovation, while investor advocates could see them as essential for protecting against risks in untested products. The notice avoids endorsing views but notes the procedural necessity under the Act.
Implications for Markets and Stakeholders
Short-term implications include delayed implementation of proposed changes, potentially affecting trading strategies in options and ETFs. For example, extensions on cryptocurrency-related filings could postpone the availability of new hedging tools amid volatile markets. Long-term, these decisions may shape the regulatory framework for tokenized assets and leveraged products, influencing competition among exchanges. Different stakeholders offer contrasting views—industry groups like the Securities Industry and Financial Markets Association often push for expedited approvals to foster innovation, whereas consumer protection organizations emphasize thorough vetting to mitigate systemic risks.
In summary, the SEC's extensions reflect a cautious approach to regulating dynamic financial markets amid operational challenges. Potential next steps include the resumption of normal agency functions upon funding restoration, leading to approvals, disapprovals, or further proceedings by the designated dates. Ongoing debates may center on balancing regulatory efficiency with comprehensive oversight, particularly as digital assets gain prominence. Stakeholders should monitor Federal Register updates for developments, as these could signal broader shifts in securities policy.