ICI Outlines Key Considerations for ETF Share Class in Mutual Funds

The Investment Company Institute has released a groundbreaking analysis on operational challenges for launching ETF share classes within traditional mutual fund structures. This development follows the SEC's September 2025 notice signaling forthcoming exemptive relief for dual-class funds.

Asset managers anticipate the hybrid structure will enhance market efficiency while offering investors the combined benefits of mutual funds' stability and ETFs' tradability. "This represents the most significant structural innovation in asset management since the ETF's invention," noted an industry participant familiar with the ICI working groups.

The paper highlights critical infrastructure requirements involving DTCC and major intermediaries. Market participants expect the change to accelerate institutional adoption of crypto-related investment products, particularly for Bitcoin and ether-based funds seeking broader distribution channels.