Cboe Files for ETF Share Class

In April, Cboe BZX Exchange, Inc. (Cboe) filed an application with the Securities and Exchange Commission (SEC) to amend its exchange-traded funds (ETFs) listing standards to permit ETF share classes issued by open-end investment companies. Cboe’s application joins eight asset managers seeking to establish an ETF share class for certain open-end funds. Such relief would mimic the exemptive relief granted to Vanguard in 2000, which had been subject to a Vanguard patent that expired in 2023. Interestingly, fund sponsor applications do not require the SEC’s review or approval process to be completed by a certain time, but Cboe’s application for a listing rule change does. According to a K&L Gates client alert, “fund sponsors must apply for SEC exemptive relief, and intended listing exchanges must file a parallel filing under Rule 19b-4 to list the fund under its approved listing rules.”

Click here to read a K&L Gates Investment Watch Update client alert on ETF share class issues.