ARK Invest Requests SEC Relief for Tokenized Venture Fund Shares

ARK Invest faces a Sept. 18, 2026 regulatory deadline as the Securities and Exchange Commission weighs an exemptive relief request to launch a tokenized venture fund share class. The application asks the agency to exempt ARK Venture Fund from provisions of the Investment Company Act of 1940. If granted, the order allows the registered closed-end fund to introduce a digital share class alongside its conventional paper-based shares. Interested persons must request an SEC hearing by Sept. 18, 2026. After that date, the SEC may issue an order granting the relief unless it decides a formal hearing is required.

Distributed Ledger Ownership for ARK Venture Fund

The filing details how the mechanism replaces traditional transfer agent recordkeeping with blockchain architecture. In a conventional fund, a transfer agent maintains a centralized master ledger of beneficial owners. Under the proposed model, the ARK Venture Fund will record ownership balances directly on a distributed ledger technology (DLT) network. DLT functions as a shared, cryptographically verified database where entries cannot be modified unilaterally. Tokenized fund shares represent pro-rata equity ownership identical to traditional shares. Eligible investors buy and redeem the tokens while smart contracts verify eligibility checks, transfer restrictions, and accredited status on-chain.

Trading Tokenized Shares on ATS Venues

The exemptive relief centers on secondary market liquidity. Registered closed-end venture funds typically lack daily redemption windows because their underlying assets consist of illiquid private technology startups. ARK proposes allowing secondary trading of the digital share class on registered Alternative Trading Systems (ATS). An ATS is an SEC-regulated trading venue that matches buyer and seller orders outside traditional stock exchanges. Investors currently face multi-year lockups in venture portfolios. Clearing trades through a broker-dealer-operated ATS allows unlisted venture shares to change hands peer-to-peer without forcing the fund to liquidate private startup stock. The digital ledger updates transfer records as ATS transactions settle. This mechanism cuts operational overhead for secondary market transfers while maintaining know-your-customer compliance.

SEC Exemptive Relief Path Before Sept. 18

The SEC uses exemptive orders to permit registered funds to test financial structures that existing statutes do not contemplate. Section 6(c) of the Investment Company Act permits exemptions when they protect investors and public interest. The SEC notice establishes a public clock. Opponents, competing asset managers, or registered market participants can file formal objections before the Sept. 18 deadline. If no party requests a hearing, the SEC Division of Investment Management can issue a final order approving the tokenized structure. A formal hearing request, however, forces the full commission to vote on whether to conduct administrative proceedings. Market participants monitor the application as a baseline for other registered funds seeking blockchain-based share issuance. Approval would establish a formal compliance pathway for unlisted funds seeking ATS liquidity.