BlackRock, the world’s largest asset manager, has joined the parade 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.
Like other applications before it, BlackRock’s application, which was filed Oct. 30, cited an exemptive order the SEC granted in 2000 to Vanguard Group. The order permitted Vanguard “to offer certain index-based open-end management investment companies with mutual fund classes and exchange-traded classes,” the filing said.
Relying on that and subsequent exemptive orders, “Vanguard has become a major sponsor of index-based ETFs,” the filing said. A patent held by Vanguard expired in May 2023.
“BlackRock is committed to aligning the strategies we offer with the investment vehicles that best suit our clients’ evolving needs,” said Rachel Aguirre, a managing director and head of U.S. iShares product at BlackRock, in a statement. “The multiclass structure opens an important new avenue of choice for clients to invest in the manner that helps them achieve their distinct financial goals.”
BlackRock is “adding its voice to the mix, which is helpful to the general effort,” said Barry Pershkow, a partner at law firm Chapman and Cutler. Vanguard is currently the only firm permitted by the SEC to offer such a multiclass structure, “but only for their index-based funds, not their actively managed ones,” Pershkow said in an email.
BlackRock had $11.48 trillion in assets under management as of Sept. 30.
