The Securities and Exchange Commission is proposing to let registered closed-end funds and business development companies (BDCs) sell investors different share classes of the same fund — something currently allowed only fund by fund, under an individual SEC order. The Commission issued the proposal September 30 and filed it with the Federal Register October 2; publication is scheduled for October 5, 2026. The same document would also loosen how often interval funds must offer to buy shares back.
What an interval fund is
An interval fund is a closed-end fund that, instead of redeeming shares on demand like a mutual fund, makes repurchase offers at net asset value on a fixed "periodic interval" — every three, six or twelve months — disclosed in its prospectus and annual report, the Commission writes. An open-end mutual fund must redeem on demand at the price it next calculates after the request arrives, which the Commission says "restricts their ability to allocate a significant portion of their portfolio to illiquid assets." BDCs are grouped with registered closed-end funds in the proposal and covered by the same rules. Citing fund reports filed with it, the Commission says interval funds grew from 58 in 2020 to 139 in 2025, with assets rising from $38 billion to $101 billion.
What a share class would change
A share class is a version of the same fund sold with its own fee structure, sales load or distribution arrangement, letting an investor "consider factors such as size of their investment, anticipated holding period, and the distribution channels through which they access the fund," the proposal says. Today a closed-end fund that wants multiple classes needs its own exemptive order; the Commission says it has issued approximately 230 such orders since 2007, to funds that are unlisted and continuously offered. The proposal would instead amend rule 18f-3 — already used by open-end mutual funds — so these funds could adopt classes under a standing rule.
The conditions, and the orders
A fund relying on the amended rule would have to adopt a written plan approved by its board, including a majority of directors who are not interested persons, setting out the arrangements and expense allocations for each class; material changes would need board approval and a finding that they are in the best interests of each class and of the fund as a whole. Each class would bear only its own expenses, with fund-wide costs such as advisory fees split by relative net assets or another reasonable and equitable basis, and no class could bear another's distribution or service fees. The fund's stock would have to be offered continuously.
The Commission proposes to rescind all but one of the existing orders covering share classes and monthly interval-fund repurchases, saying the amendments would render them "moot, superseded, and inconsistent with the proposed amendments." It would keep one recent order for classes that trade on an exchange in tokenized form. It also proposes a one-year compliance period after the amendments take effect, and says it would wait that same year before rescinding the relief, to give those funds time to bring their operations into conformity.
Disclosure and the deadline
The proposal would update Form N-2, the closed-end fund registration form, to cover multiple-class structures and add "enhanced shareholder report disclosure regarding fees and expenses," and would extend to closed-end funds the multiple-share-class reporting open-end funds already file on Form N-CEN. Comments are due 60 days after Federal Register publication. The document's DATES paragraph is still a bracketed placeholder, so it prints no deadline; counting 60 days from the scheduled October 5 publication gives December 4, 2026, by this desk's count.