On September 29, 2025, the SEC issued a notice1 relating to an amended application2 filed by DFA Investment Dimensions Group Inc., et al., ("DFA") for an exemptive order that would permit registered open-end funds to offer a class of shares that operates as an exchange-traded fund and one or more classes of shares that operate as a mutual fund ("ETF Share Class Relief"). This long-awaited relief has the potential to transform the registered funds industry.
The amended Application that was formally "noticed" by the SEC is substantially similar to DFA's prior application (the "Prior Application") discussed in Ropes & Gray's June 11, 2025 white paper, "Preparing for ETFs as a Share Class: Updated and Expanded Second Edition" (available here).3 The principal change to the Prior Application is the addition of a specific methodology for allocating income and expenses among classes of funds that declare dividends more frequently for one or more mutual fund classes than for the ETF class of the same funds.
The Notice provides that an order (the "Order") granting ETF Share Class Relief will be issued to DFA unless the SEC orders a hearing on the Application. The earliest date on which the SEC may grant the Order is October 16, 2025, which is the deadline for interested persons to submit hearing requests to the SEC.4 This timing is noteworthy in being somewhat expedited compared to a typical exemptive order (which is generally issued 25 days after being formally noticed), though it may be impacted by the federal government shutdown.
The staff of the SEC's Division of Investment Management has requested that the more than 80 other applicants currently seeking ETF Share Class Relief file amended applications substantially identical to the Application and indicated that doing so will position applicants to receive ETF Share Class Relief most promptly following the SEC's grant of the Order.
Ropes & Gray represents nearly 20 ETF Share Class Relief applicants and has been actively engaging with the SEC staff on pending applications and with various industry participants to prepare the operational, governance and compliance framework that will be required to implement ETF Share Class Relief.
Footnotes
1. DFA Investment Dimensions Group Inc., et. al., Investment Company Act Release No. 35770 (Sep. 29, 2025), available here (the " Notice").
2. DFA Investment Dimensions Group Inc., et. al., SEC File No. 812-15484 (Sep. 26, 2025), available here (the " Application").
3. An earlier version of this white paper, dated March 17, 2025, is available here. For more information about ETF Share Class Relief, please see Ropes & Gray's white paper entitled "Overview of ETF Share Class Operational Issues," dated June 26, 2025, available here.
4. The Notice provides that hearing requests must be received by the SEC by 5:30 p.m. on the date that is 15 days after the Notice is published in the Federal Register. The Notice was published in the Federal Register on October 1, 2025 (see here).
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