A revolutionary fund structure that will allow asset managers to decrease their clients’ tax payments while growing their ETF businesses could soon be approved by the Securities and Exchange Commission, Bloomberg reports.

In this innovative fund model, a single share class of a mutual fund would be exchange-traded. Vanguard patented the model more than twenty years ago. The novel model was instrumental in helping Vanguard save its clients billions on taxes. It transports the tax advantages of the ETF onto the mutual fund, which is a great prospect for asset managers who want to access the ETF industry.

According to Bloomberg, last week, at least seven firms like JPMorgan and PIMCO filed amendments to their applications to establish funds that have both ETF and mutual fund share classes. The filings update initial applications—some of which were inactive for months—with additional details regarding the fund structure. This indicates that the SEC has been involved in constructive talks with an increasing number of applicants, industry lawyers note

“The SEC signaling is clear. These amendments really constitute the SEC prioritizing ETF share class relief,” noted Aisha Hunt, a principal at Kelley Hunt law firm, which is working with F/m Investments on its application.

The latest round of filings—which are also coming from firms like Charles Schwab and T. Rowe Price— is yet another signal that the SEC is quickly advancing its decision on multi-share class funds, after F/m Investments and Dimensional Fund Advisors (DFA) also filed amendments earlier this month.

Bloomberg reports that DFA’s amendment included more details regarding fund board reporting as well as the board’s responsibilities to monitor the new structure's fairness for each shareholder.

Following the 2023 expiration of Vanguard’s patent on the design, more than 50 other asset managers requested the SEC for exemptive relief to utilize the fund design. However, it was not until earlier in 2025, when SEC acting chair Mark Uyeda stated that the SEC should prioritize the applications, that it became clear the SEC would be interested in letting other fund firms to use the model, Bloomberg says.

However, an approval doesn’t mean that an issuer will be able to immediately begin using the fund blueprint. Because ETFs are traded during market hours, they would need a different infrastructure than mutual funds. Firms that only have the latter structure will need to hire staff as well as establish relationships with ETF market participants prior to implementing the dual-share class model.