CBOE Applies for SEC Approval to List and Trade ETF Share Classes

Who may be interested: Mutual Funds; Exchange-Traded Funds

Quick Take: Cboe BZX Exchange, Inc. (“CBOE”) has filed an application with the SEC pursuant to Rule 19b-4 under the Exchange Act seeking approval of a proposed amendment to one of the CBOE’s listing rules which would allow issuers to offer a class of exchange-traded fund shares (“ETF Shares”) for existing US mutual funds. The CBOE’s application is the first by an exchange and creates a regulatory deadline within which the SEC must respond to the CBOE’s application.


Since Vanguard’s patent on its exemptive order allowing it to offer a separate ETF Share class of its existing mutual funds expired in May 2023, multiple fund complexes have filed for similar exemptive relief. However, the SEC has yet to grant any of the fund complexes’ applications requesting exemptive relief.

The proposed amendment to CBOE Rule 14.11(1) would allow the CBOE to approve an open-end fund’s class of ETF Shares for listing and trading on CBOE, while the fund also offers a class (or classes) of shares which are not exchange-traded, so long as the ETF Shares operate in reliance on, or based on exemptive relief under, Rule 6c-11 under the Investment Company Act. When it adopted Rule 6c-11, the SEC declined to expand the Rule to allow funds to offer a multi-share class structure that included ETF Shares. If the SEC were to approve the CBOE’s application, funds seeking to list ETF Shares on the CBOE would still need to receive an order from the SEC granting separate exemptive relief to offer a multi-share class structure.

While the SEC has not yet acted on any of the fund complexes’ exemptive applications, the SEC is required to respond to the CBOE’s application within a maximum of 240 days. 

The CBOE’s application is available here.

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