SEC Issues Order Granting Dual Share Class Relief

In November, the Securities and Exchange Commission (SEC) issued an order granting exemptive relief to Dimensional Funds to offer ETFs as a share class within a multiple share class structure. The exemptive application was originally filed in July 2023 and led to more than 80 applications by fund sponsors to obtain the same relief. After multiple amendments, the Dimensional application now serves as the model for the other filings. The relief imposes disclosure and oversight obligations, including initial and annual board determinations that the dual share class continues to serve the best interests of both the ETF and mutual fund shareholders, as well as requirements for monitoring cash levels, brokerage practices, and capital gains allocations.

Click here to read a client alert from Stradley Ronon covering the SEC’s order on dual share class relief.

Click here to watch an archived video of MFDF’s webinar covering the dual share class relief with partners from Stradley Ronon.