SEC’s Dual Share Class Approval Signals New Era for ETFs
The September 2025 decision by the Securities and Exchange Commission (SEC) to approve one company’s application to offer dual share classes of mutual funds alongside an exchange-traded fund (ETF) marked a significant milestone for the US fund industry. In “SEC’s Dual Share Class Approval Signals New Era for ETFs,” authors Ilan Guedj and Brian Henderson discuss how this decision will likely have a profound impact on the US fund industry.
Drs. Guedj and Henderson examine the growth of ETFs and how that growth has reshaped the investment landscape over the past few years. Following the recent SEC decision, companies will be able to offer both mutual fund and ETF classes within the same portfolio. Drs. Guedj and Henderson explore the key differences between mutual funds and ETFs, highlighting the SEC concerns about the dual share class structure. They also discuss the potential challenges this structure may pose for broker-dealers.
After providing insight into industry and regulatory perspectives, the authors conclude that the SEC’s decision will likely accelerate the trend of expanding ETF offerings.
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