SEC Opens Door to Exchange-Listed, Tokenized Interval Fund Shares

Background

On September 21, 2026, the SEC issued an order (the “Order”) granting novel exemptive relief to Dechert clients ARK Investment Management LLC and ARK Venture Fund to permit the Venture Fund to offer three types of share classes: (i) classes of shares that are distributed through traditional wealth channels (“Unlisted Class”), (ii) a class of shares (“Exchange Class”), that can be listed on a national securities exchange, and (iii) a class of shares (“Tokenized Class”) the ownership of which will be recorded using distributed ledger technology that may be traded on one or more alternative trading systems (“ATS”).¹ While the SEC has for decades granted relief to allow interval and tender offer funds to issue multiple classes of shares, applications for such relief have historically included a representation that shares of the subject funds will not be listed on any securities exchange, nor quoted on any quotation medium, and that the subject funds do not expect there to be a secondary trading market for their shares. The SEC and the industry have understood this language to prohibit the exchange-listing of a class of an interval or tender offer fund’s shares. The Order, however, removes this prohibition and expressly allows a registered interval or tender offer fund to issue both an Exchange Class and a Tokenized Class. In addition, the Order allows (but does not require) a fund to offer an exchange privilege, pursuant to which a holder of an Unlisted Class share may convert to an Exchange or Tokenized Class share (or vice versa) on a NAV-for-NAV basis.

What are the Conditions to the Relief?

An interval or tender offer fund relying on the Order must:

1. Comply with certain rules under the Investment Company Act of 1940 (the “Act”) that are typically only applicable to open-end funds and the FINRA sales charge rule (the same rules as in prior multi-class orders that did not include the exchange listing or tokenization elements).² In addition, it must comply with the provisions of Rule 18f-3, and any costs attributable specifically to a class must be allocated exclusively to that class, except that costs of annual shareholder meetings, if required by the Exchange-listing rules applicable to the Exchange Class, will be borne by all classes in accordance with the requirements of Rule 18f-3.
2. Each business day, disclose prominently on its website, which will be publicly available and free of charge, its current net asset value per share as of the end of the prior business day.
3. Not impose any early withdrawal charge on any Exchange Class shares or Tokenized Class shares.
4. Clearly disclose in its registration statement and on its website that purchases and sales on an Exchange, an ATS, or in peer-to-peer transactions may be at prices other than NAV, which may result in shareholders purchasing shares for more than, or selling shares for less than, NAV.
5. To the extent it is required to hold an annual meeting of shareholders to comply with the listing rules applicable to the Exchange Class, disclose that the non-Exchange-listed classes will pay a portion of the related expenses, even though they are only subject to the requirement due to the listing rules applicable to the Exchange Class.
6. Perform anti-money laundering and know your customer reviews of all wallets that propose to hold Tokenized Class shares.

Can other Asset Managers Rely on the Relief?

No. A fund sponsor must seek its own exemptive order from the SEC staff to take advantage of this novel relief. However, the relief does apply to a sponsor’s future interval and tender offer funds, and so once relief is received, it can be relied upon to offer multiple funds.

What Potential Benefits Does the Order Offer?

We anticipate that there are potentially two significant benefits to the Order. First, most interval funds and tender offer funds available today are available only through wealth distribution channels. This inherently limits the potential audience for a fund’s shares to those with access to these channels. Making shares available on an exchange significantly simplifies the acquisition process, allowing interested investors to purchase shares directly from their brokerage account, without foreclosing the ability of a fund to also distribute through existing wealth channels and relationships. Tokenized shares may also appeal to more crypto-native investors. This is potentially a significant expansion of an interval fund’s or tender offer fund’s investor base.

Second, exchange listing, combined with the ability to engage in class-to-class exchanges, provides shareholders with an additional liquidity option in the event they are seeking an exit. In traditional interval and tender offer funds, an investor must wait until the next repurchase or tender, which may be a quarter (or more) away, to exit their position, and they face the risk of proration if a repurchase or tender offer is oversubscribed. The ability to sell the shares in the secondary market, at a market-determined price, provides another exit path. While such exits may be at discounts, investors can compare market prices to the previous day’s posted NAV to determine what is right for them.

What’s Next?

While the Order is an important step in bringing an interval fund with an Exchange Class and a Tokenized Class to market, there are other important registration, disclosure, and operational challenges that remain to be worked through to launch such a product.

Celebrating 50 years of dedication to the asset management industry