ChainCatcher reports that ARK Investment Management has submitted an exemption application to the U.S. SEC seeking to issue a tokenized share class for its venture fund, ARK Venture Fund. The SEC issued a related notice on August 24 and set September 18 as the deadline for requests for a hearing. The fund is a continuously offered closed-end interval fund with total assets of $562 million as of January 31. The application proposes two share classes: an exchange class to be listed on a national securities exchange, and a tokenized class whose ownership will be recorded via distributed ledger technology and transferred peer-to-peer between registered alternative trading systems or whitelisted wallets. Tokenized shares will be issued at net asset value, with no sales charges, distributed by registered broker-dealers or the fund’s transfer agent, and investors will bear transaction costs and other expenses. ARK seeks relief under Sections 6(c), 18, and 17(d) of the Investment Company Act and Rules 23c-3 and 17d-1, with Dechert serving as legal counsel. The application does not specify a tokenization service provider or blockchain, only listing categories for fees for a “tokenization agent” and “fund transfer agent”; BNY Mellon currently serves as the fund’s transfer agent, manager, and custodian. ARK Venture Fund holds equity in Securitize and a $10 million convertible note; Securitize is the transfer agent for BlackRock’s BUIDL fund. The SEC has not yet formally approved the industry-anticipated “innovation exemption” framework for tokenization, and related rules are still under development.
ARK Applies to SEC for Tokenized Share Class in Venture Fund
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Summary
ARK Investment Management has filed an exemption request with the SEC for a tokenized share class in its venture fund, the ARK Venture Fund. The SEC published the notice on August 24, with a September 18 deadline for comments. The fund, a continuously offered closed-end interval fund, held $562 million in assets as of January 31. The application includes an exchange-listed share class and a tokenized class via distributed ledger, enabling peer-to-peer transfers. Tokenized shares will be issued at net asset value, with no sales charges. ARK is seeking relief under several sections of the Investment Company Act. Dechert serves as legal counsel. The application does not specify a blockchain or service provider, only listing fee categories for a “tokenization agent” and “fund transfer agent.” BNY Mellon is the fund’s transfer agent, manager, and custodian. The ARK Venture Fund also holds equity and $10 million in convertible notes in Securitize. The SEC has not yet approved a tokenization exemption framework. This represents a key development in SEC and on-chain news.
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