ARK Investment Management Seeks SEC Approval for Tokenized Share Class
ARK Investment Management is seeking the approval of the U.S. Securities and Exchange Commission (SEC) for a novel tokenized share class intended for its venture fund, which currently holds assets totaling $562 million. The initiative aims to utilize distributed ledger technology to maintain ownership records within this fund, reflecting a growing trend of modernizing fund management practices.
Details of the Application
According to the newly submitted application, the ARK Venture Fund plans to introduce a Tokenized Class of shares alongside a recently proposed Exchange Class. This request seeks to modify an exemptive order previously granted by the SEC in November 2025. The SEC has acknowledged the request, publishing a notice on August 24, with a deadline of September 18 set for any requests related to a potential hearing.
The original application was filed on May 20, with subsequent amendments made on June 11 and August 7. The filing, under the identifying number 812-16031, requests exemptions under multiple sections of the Investment Company Act, specifically sections 6(c), 18, and 17(d), in addition to Rules 23c-3 and 17d-1.
Investment Opportunities
If approved, these two classes of shares will provide different avenues for investors looking to trade. The proposed Exchange Class shares could be traded on national securities exchanges, while the Tokenized Class shares would leverage blockchain technology to record ownership. This facilitates trading through alternative systems registered under Regulation ATS as well as through other channels such as peer-to-peer transactions.
ARK has clarified that it is not seeking authorization to list or trade these tokenized shares on DeFi platforms, narrowing the focus of its application to regulated environments. The firm is following the existing exemptive application process, as discussions about a broader regulatory framework for tokenized securities at the SEC continue to evolve.
Clarifications and Distinctions
Within the proposal, ARK articulated that the request is strictly for approval of the share class structure and does not seek any regulatory exemption regarding the technology employed for shareholder record-keeping. Notably, the ARK Venture Fund is distinct from the popular ARK Innovation ETF, which commands a portfolio worth approximately $6.55 billion.
As of January 31, the ARK Venture Fund reported a total of $562 million in assets, associated with share classes D, S, and U, which were priced between $49.69 and $49.83 as of mid-May. Under the proposed initiative, investors acquiring Tokenized Class shares would do so via the fund’s standard subscription procedures at their net asset value, with no associated sales charges.
All expenses tied specifically to the Tokenized Class shares would be managed by the respective shareholders. The filing also discusses various transaction costs related to buying, selling, and distributing dividends on these shares.
Regulatory Context and Future Developments
The application is a modification of a previous SEC order permitting multiple share classes, which initially prevented ARK from introducing trading options until they returned to the SEC for further discussions. Presently, no specific blockchain or tokenization partners have been cited in the proposal, only referenced in general terms as “tokenization agents”.
The Bank of New York Mellon has been identified as the transfer agent and custodian for the ARK Venture Fund, as indicated in their semi-annual report. Additionally, ARK has ties to Securitize, a company specializing in tokenization, through its holdings, including equity in Securitize and a $10 million convertible note.
As tokenization trends expand, Securitize has made significant developments, including a recent launch involving a tokenized high-yield fund in partnership with Neuberger, directed at investing in high-yield bonds.
As part of ongoing shifts in regulatory landscapes, the SEC is working toward a more comprehensive framework to enable the trading of tokenized securities. Recent discussions include innovations around granting selected firms the ability to test blockchain-based securities in controlled conditions, though the specific exemption is still under discussion and has not yet been finalized.
ARK’s application will proceed through the traditional regulatory processes while the SEC navigates its broader innovations concerning transfer agents and blockchain technology in the industry. A proposed overhaul by the SEC aims to modernize transfer agent registration and recordkeeping, including the implementation of blockchain for records management, with comments on these proposals due by November 3.
