Written by Suzanne McGee
(Reuters) – CBOE Global Markets said it has filed a request with the SEC for regulatory approval to change rules and allow issuers to add an exchange-traded fund (ETF) share class to existing mutual funds. The exchange made the announcement on Thursday.
If approved, existing asset managers will be able to more easily expand strategies that currently only exist as mutual funds by simply adding an ETF share class, opening the door to thousands of new funds. will be held.
If the SEC approves CBOE’s request, “both the number of ETFs and ETF assets could surge,” said Todd Thorne, an ETF analyst at Strategas.
Vanguard Group’s patent on the stock class concept expires in May 2023, and other asset managers, including Dimensional Fund Advisors, Morgan Stanley, and Fidelity, are slowly but surely seeking SEC filings to replicate the model. seeking approval.
Other companies, including T. Rowe Price and JPMorgan, have expressed interest in this approach of launching new ETFs, a lower-cost alternative to converting or replicating existing mutual fund strategies.
Cboe’s own filing is the first by an exchange and will be subject to regulatory deadlines. That would encourage the SEC to actively consider an issue it has neglected for the past 11 months.
“We aim to assist issuers in pursuing exemption relief,” said Rob Marrocco, global head of ETP listings at Cboe. He said in a statement that if approved, it would significantly improve cost and portfolio management efficiency for investors and increase liquidity.
(Reporting by Suzanne McGee; Editing by Stephen Coates)
