SEC Issues Combined Notice to 30 Applicants Allowing for ETF Class

Who may be interested: Registered Investment Companies; Directors of Registered Investment Companies; Investment Advisers 

Quick Take: The SEC’s Division of Investment Management has granted preliminary approval to 30 firms to offer funds with both mutual fund and ETF share classes. 

The SEC recently announced that it has granted preliminary approval to 30 investment firms to offer funds featuring both ETF and mutual fund share classes. Each firm requested an order that would permit them, as a registered open-end investment company, to offer a single pooled vehicle with one class of exchange-traded shares and one or more classes of mutual fund shares. The order would provide these firms with two broad categories of relief: (i) relief necessary to permit standard ETF operations consistent with Rule 6c-11 under the 1940 Act (because Rule 6c-11 did not permit the multi-class structure); and (ii) separate relief necessary for a fund to offer an ETF class and one or more mutual fund classes.

This action was largely expected after Dimensional Fund Advisors received similar approval from the SEC in October. Previously, Vanguard had held exclusive rights to this multi-class share structure under an exemption secured in the early 2000s. With the SEC’s recent action, Vanguard’s monopoly on this structure has ended, and all investment advisers may seek to create funds using the structure. At the ICI’s Securities Law Developments Conference in November 2025, Commissioner Uyeda noted that the Staff aimed to provide this relief to investment firms by year-end. To meet this goal, the Staff issued a combined notice covering 30 different firms.

This relief could be a significant victory for asset managers, as the multi-class structure generally helps advisers reduce potential for taxable gain distributions in pooled vehicles. It also provides a new avenue for asset managers to create ETFs based on their existing mutual funds.

Notably, the combined notice may signal a shift in how the SEC Staff handles financial industry proposals, aligning with Chair Paul Atkins’ statements encouraging financial innovation in capital markets. Traditionally, each applicant for exemptive relief receives an individual notice and order from the SEC, even when seeking nearly identical relief. The issuance of a combined notice—covering multiple applications—marks a departure from this practice. While this change could be due to staffing constraints or the government shutdown, it may also reflect a new approach for considering industry-wide proposals. Several other federal regulators use a combined notice approach for identical exemptive relief. It remains to be seen whether this signifies a shift in how the SEC will process and approve applications for exemptive relief.

The combined notice published by the SEC granting this relief is available here.