AllianceBernstein has joined the list of firms seeking exemptive relief from the Securities and Exchange Commission to offer ETF share classes of mutual funds, a filing with the SEC showed.
In the May 1 filing, applicants AB Municipal Income Fund and AllianceBernstein requested an order “that would permit a Fund to offer a class of exchange-traded shares … in addition to classes of shares that are not exchange-traded.”
They also requested that the order apply not only to existing and future series of the AB Municipal Income Fund but also to “other existing or future open-end management investment companies registered under the 1940 Act and series thereof … that are actively managed and advised by the Adviser,” according to the filing, which identified AllianceBernstein, also known as AB, as the adviser.
“We filed the application for share-class relief because we think it could be a beneficial structure in many circumstances, and we’re interested in engaging with the SEC and ETF ecosystem partners in working out a path that creates value for investors,” said Noel Archard, AB’s global head of ETFs and portfolio solutions, in comments provided by a spokesperson.
With its filing, AB joins the list of applicants that have filed for such relief either shortly before or in the wake the May 2023 expiration of a patent held by Vanguard Group. Others seeking such relief include Dimensional Fund Advisors, Fidelity Investments and, more recently, PGIM Investments.
Echoing language found in earlier applications, AB’s filing said that in 2000, the SEC granted an exemptive order to Vanguard allowing it “to offer certain index-based open-end management investment companies with mutual fund classes and exchange-traded classes.”
Relying on that and subsequent exemptive orders “Vanguard has become one of the major sponsors of index-based ETFs,” the filings said.
As of March 31, AB had $759 billion in total assets under management, which included $2.7 billion in ETF AUM.
