BlackRock Files for SEC Approval of ETF Share Classes

BlackRock Inc (NYSE:BLK), the world's largest asset manager, has applied to the U.S. Securities and Exchange Commission (SEC) for approval to offer exchange-traded fund (ETF) share classes for investment funds. The application was submitted on Wednesday, and BlackRock became the latest and largest company to seek this approval following the expiration of Vanguard's patent on ETF share class structures in May 2023.

Since the expiration of the patent, over 30 asset managers have filed similar applications. However, so far, the SEC has only granted Vanguard the authority to offer both ETF shares and traditional mutual fund units within the same fund structure. There is no set deadline for the SEC to make decisions regarding these applications.

Cboe Global Markets (NYSE:CBOE) is also taking steps to expedite the SEC's decision-making process. The company has proposed a rule change that would allow the listing and trading of ETF share classes. This proposal requires the regulators to respond within 240 days, mandating a decision by the end of 2024.

In related developments, Dimensional Fund Advisors, which was among those that applied last year for the right to convert mutual funds into ETFs, reported receiving support letters from hundreds of financial advisors. These advisors manage a total of $3 trillion in investor assets, indicating strong interest in the sector for offering mutual funds in ETF structures.