BlackRock Joins ETF Revolution: A New Chapter in Asset Management

BlackRock Inc. has applied to the U.S. SEC to create ETF classes for its mutual funds, joining a wave of over 30 managers following a patent expiry by Vanguard in May 2023. Cboe Global Markets also seeks a rule change to list ETF classes, with a 240-day response deadline.

BlackRock Inc., a major player in asset management, filed an application with the U.S. Securities & Exchange Commission on Wednesday. The company seeks approval to introduce exchange-traded fund classes for its mutual funds. BlackRock is the largest firm among more than 30 money managers making similar requests since the ETF share class patent held by Vanguard expired in May 2023.

The U.S. SEC, which has no deadline to rule on these applications, has so far only allowed Vanguard to offer both exchange-traded shares and traditional units within the same mutual fund. However, there is a growing push for a decision as Cboe Global Markets is requesting a rule change that would permit it to list and trade ETF share classes. Regulators are obliged to respond to such requests within 240 days, with a potential resolution by late 2024.

Dimensional Fund Advisors, among the first to seek permission to offer its existing mutual funds in an ETF format, has garnered support from several hundred financial advisers managing $3 trillion in investor assets. The outcome of these applications could significantly transform the asset management landscape.

(With inputs from agencies.)