SEC Prioritizes Dual Share Class ETF Applications Amid Growing Requests

Securities and Exchange Commission (SEC) Acting Chair Mark Uyeda has emphasized the need to expedite the review of 51 pending applications from firms seeking exemptive relief to create exchange-traded funds (ETFs) from mutual funds. Speaking at the Investment Company Institute's conference, Uyeda noted that these applications have accumulated over two years and are crucial for fostering innovation in the financial markets. The SEC is responding to the increased competition from ETFs, which have gained market share over mutual funds due to their lower costs and trading flexibility. Companies, including BlackRock and Morgan Stanley, are eager to convert existing mutual funds into ETFs now that a key patent has expired. Uyeda criticized the current administration's approach to innovation, calling for a more flexible review process. He indicated that this expedited review would allow the SEC to better assess potential benefits and risks associated with these new financial products.