ARK Files Exemptive Application for Tokenized Venture Fund Share Class

ARK Investment Management has submitted an exemptive application to the Securities and Exchange Commission seeking approval to record ownership of a new ARK Venture Fund share class on a distributed ledger, with trading to occur on registered Alternative Trading Systems. Hearing requests on the application are due by September 18, 2026.

The filing is narrow in scope but broad in implication. Under the proposed structure, a new share class of the ARK Venture Fund would use distributed ledger technology (DLT) to record ownership rather than relying on traditional transfer agent infrastructure. Investors would trade those tokenized shares on registered Alternative Trading Systems, or ATS venues, which are SEC-regulated secondary markets that already handle certain non-exchange securities. The mechanism is incremental, not radical, but it requires SEC exemptive relief because existing Investment Company Act rules were written before blockchain-based record-keeping existed.

ARK's application is among the first from a mainstream asset manager to pursue a formal regulatory pathway for a tokenized fund share class. Earlier tokenization experiments in the U.S. have largely been confined to smaller platforms, private pilots, or structures that sidestepped the Investment Company Act entirely by operating outside registered fund wrappers. Filing for exemptive relief signals that ARK is seeking to bring tokenized securities fully inside the regulatory perimeter rather than around it.

The SEC's posture toward blockchain-based financial infrastructure has shifted measurably since 2024. The Commission approved spot Bitcoin ETFs in January 2024 and spot Ethereum ETFs later that year, each time extending established securities frameworks to cover new asset types. An exemptive order for tokenized fund shares would be a different kind of action, modifying how ownership in a registered fund is recorded and transferred rather than simply approving a new product category. Still, the directional signal from those prior approvals is relevant: the Commission has shown it can adapt existing frameworks rather than wait for Congress to rewrite them.

Approval is far from certain. The exemptive process is deliberate by design. The SEC can deny the application outright, approve it with conditions that materially change the structure, or allow it to sit without action. Outstanding questions around custody of tokenized securities, settlement finality on DLT systems, and the tax treatment of blockchain-recorded fund interests remain unresolved at the federal level. Institutional investors, many of whom lack the operational infrastructure to hold or transfer DLT-based assets, represent a separate adoption hurdle that regulatory approval alone would not clear. Fund distribution incumbents, including transfer agents and custodians whose business models depend on existing infrastructure, have strong incentives to engage in the comment process.

The September 18 deadline for hearing requests is the next procedural marker. If parties request a hearing, the timeline extends further before any Commission vote. If no hearing is requested, the SEC can act on the application on its own schedule, which carries no statutory deadline.

A positive exemptive order would create a regulatory template that other asset managers could follow, potentially opening the door to tokenized share classes across mutual funds, interval funds, and other registered vehicles. The global tokenized asset market has attracted significant institutional attention. Boston Consulting Group estimated in 2023 that tokenized illiquid assets could reach $16 trillion by 2030, though that figure encompasses a much broader universe than registered U.S. fund shares. BlackRock launched its BUIDL tokenized money market fund on Ethereum in March 2024 under a Regulation D private placement exemption, a structure that bypasses the Investment Company Act constraints ARK is now asking the SEC to address directly.

Whether the Commission grants that relief will depend on how persuasively ARK can demonstrate that DLT-based record-keeping meets or exceeds the investor protection standards the existing rules were designed to enforce. The application itself is not yet public in full, but the September 18 hearing request deadline means the formal comment and review period is already underway.