Dimensional Files Amended Application for ETF Share Class Exemptive Relief

Dimensional has filed an amended application for exemptive relief to offer ETF share classes following productive conversations with the Securities and Exchange Commission (SEC) staff.

The firm has the longest-pending application of more than 50 active applicants for share class relief, which together represent over $15 trillion in mutual fund and ETF assets. Many of the managers that subsequently filed for exemptive relief have followed Dimensional’s application closely, and analysts have noted the firm’s application has become an industry template.

At a recent industry conference in March 2025, SEC Acting Chairman Mark Uyeda commented, “More than two years have passed since the most recent set of exemptive applications for ETF share class relief was filed. I have directed Commission staff to prioritize their careful review of the many applications filed for this relief, and I look forward to considering their recommendations.”

Dimensional has led the way with significant developments in the ETF industry following the adoption of the SEC’s ETF Rule (Rule 6c-11) in 2019. Dimensional was the first asset manager to convert mutual funds to ETFs at scale and has developed custom create/redeem basket methodologies that enable low-cost and tax-efficient daily rebalancing, benefiting all shareholders of the ETF.

Dimensional is the largest active ETF issuer, with approximately $180 billion in ETF assets under management as of March 31, 2025, according to Morningstar data. The firm’s suite of 41 ETFs has had more than $100 billion in inflows through the end of March since the launch of its first ETF in November 2020 and converted approximately $45 billion across seven tax-managed mutual funds, which since the conversions have had an average inflow of approximately $5 billion since listing, compared to an average of approximately $60 million for other converted funds across the industry.

Gerard O’Reilly, Dimensional Co-CEO and Co-CIO, said:

“We believe that our revised application could continue to serve as a model for the industry and provide a path to approval this year to offer the benefits of ETF share classes to more investors. We appreciate Acting Chairman Uyeda’s recent public comments prioritizing the review of the applications filed for this relief. If approved, increased share class availability could be a significant win for investors and carry the potential to revolutionize the ETF and mutual fund landscape.

The ability to offer both mutual fund and ETF share classes in certain funds could provide lower transaction costs, tax efficiencies, and benefits of scale to all shareholders. Granting ETF share class relief more broadly would give investors more fund groups and strategies to choose from, and competition in the market would benefit investors by incentivizing funds to operate efficiently and keep fees and expenses low. Allowing existing mutual funds to offer ETF share classes would also give investors more choice by enabling them to decide on their preferred way—an ETF share or mutual fund share—to access the same strategy.”