ETF share class relief, run every day: each threshold crossing reaches the board inside 30 days, cause traced and every figure cited
Every crossing reaches the board inside 30 days, cause traced and every figure cited.
See one case, screen by screen ↓ETF share class relief is the SEC exemptive relief, first granted on November 17, 2025, that lets a US mutual fund offer an ETF share class of the same portfolio — a dual share class structure — under conditions its board oversees. ETF Share Class Relief is the system that runs those conditions: seven agents compute transaction costs, cash and capital-gains distributions for every fund each day, trace each threshold crossing to its cause, and draft the 30-day board notice, the adviser reports and the draft best-interest findings with every figure cited. The Fund CCO and the Fund Treasurer approve, and the board liaison releases.
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Since November 17, 2025, ETF share class relief from the SEC has again let a US mutual fund add an ETF share class to the same portfolio, and more than 80 managers sought it. The order's conditions become permanent work for every fund that uses it: an initial adviser report before the board considers the plan, board best-interest findings before launch and every year after, board-set thresholds on portfolio transaction costs, cash and capital-gains distributions, a notice to the board within 30 days after any period in which a threshold was exceeded — with its cause and the adviser's recommended remediation — an ongoing adviser report each year, and six years of records.
Today the monitoring runs on month-end spreadsheets built from fund accounting's realized-gain reports, the transfer agent's class-flow files and a trading-cost report, and compliance reviews them weeks later. A crossing is found with part of the 30 days already gone, its cause is argued in meetings instead of traced to flows and lots, and nothing checks the draft notice against what the board was told before. Meanwhile the cost falls on the other class: cash redemptions from the mutual-fund classes force sales that realize gains every class must distribute.
Estimated split, in days of the order's 30, for one exceedance notice — by hand with month-end spreadsheets, and with the solution.
Seven agents compute, trace, draft and check every condition daily; the CCO and Treasurer approve, the liaison releases.
Quillfield Funds Trust has 34 funds with an ETF share class and $242.0 billion of net assets. On October 29, Mid Cap Value Fund paid a capital-gains distribution of $0.62 a share — 1.80% of NAV against the board's 1.50%. Here is what happens next, screen by screen, in the working solution.
Helen's Today screen opens on 102 condition values computed at 6:12 a.m. — 34 funds times three — with 3 open cases, 5 funds on watch and 26 of 34 annual findings approved for the December board book. Under Needs you, the Mid Cap Value notice is on day 4 of 30. Beside it, each agent says what it did overnight, with its source one click away.
Check agent: “Notice EX-26-014 calls the Harborline redemption ‘isolated’, but the Sep 16 minutes record a reallocation through year end. I suggested new wording; the choice is yours.”
The monitor lists all 34 funds, closest to a threshold first. For Mid Cap Value Fund — ETF class QMCV, 21.7% of $6.82 billion — three strips show today's value against the board threshold: transaction costs 6.1 bps of 8.0, clear; cash 2.40% of 3.00%, on watch at 80%; capital-gains distributions 1.80% of 1.50%, exceeded at 120%. The clock in the corner reads Day 4 of 30, notice due Mon, Nov 30.
“Thresholds approved by the Board on Mar 11, 2026” · “Watch band from 80% of a threshold”
The working opens: $0.6200 a share distributed on October 29, a $34.44 NAV on the ex-date, 0.62 ÷ 34.44 = 1.80%, each input cited to the distribution record, at 97% confidence under rule CG-1 of the Ongoing Monitoring Process. The agent projected the crossing when the distribution was declared on October 23, told the CCO and ETF product, and opened case EX-26-014 only when it was paid.
The Monitoring agent never changes a threshold and never opens a case on a projection alone.
The Cause agent ties the $122.8 million distribution to the trades behind it: $95.8 million, 78%, was realized on sales to meet mutual-fund-class cash redemptions, $640 million of them from one intermediary, Harborline Retirement Services, on September 14–18. ETF-class redemptions went out in kind. The ETF class received $26.6 million of the distribution, an estimated $20.7 million of it from mutual-fund-class flows. Had Harborline been paid in kind, the distribution would have been 1.06%.
Cause agent, 92% confidence. Below 85%, a person confirms the cause before any notice is drafted.
The Notice agent drafts the notice from the case and the adviser's remediation plan REM-2026-07: what was exceeded, the cause, the effect on each class and four remediation steps — 14 figures, each cited. Before any person sees it, the Check agent reads it against the order, prior notices and the minutes, and flags one sentence. Marcus Lee checks the figures against the ledger and leaves the flag for Helen.
“The draft calls the redemption ‘isolated, one-time’. On Sep 16 the Adviser told the Board that Harborline is reallocating through year end.”
Helen opens the citation. The September 16, 2026 minutes, page 9, item 7, open over the case with the passage marked: the Adviser reported that Harborline is reallocating its model portfolios across Quillfield funds through year end and expects further cash redemptions from the mutual-fund classes. The Independent Trustees asked to be told of any threshold it affects.
Every value and every agent statement links to its row, page or file.
Helen takes the Check agent's wording: “The exceedance resulted principally from a $640 million redemption by Harborline Retirement Services, part of the model reallocation the Adviser reported to the Board on September 16, 2026.” The edit is saved as a tracked change, the Check agent re-checks it and its flag reads Resolved. She approves as CCO with the reason code “Approved with edits”.
“Signed as Helen Okafor, Fund Chief Compliance Officer · electronic signature with reason · logged to the audit trail.”
Viewed as Marcus Lee, who prepared the notice, the approval is locked: “You prepared this notice, so you cannot approve it (maker-checker).” Daniel Reyes, the Fund Treasurer, sees Helen's edit as a tracked change beside the original wording and approves second, with the reason “Approved; figures re-verified to source”.
Daniel Reyes: “I sign nothing whose figure I can't click through to the ledger.”
Only the board liaison releases, and only what both approvers signed. Laura releases the notice to the board portal for the December 9, 2026 meeting, and the clock reads Sent on day 4 of 30. The Records agent files it in the six-year record and directors' counsel is notified. When the board answers, Laura files the response against the case.
Records agent: “Released to the board portal for the December 9 meeting on day 4 of 30. Filed in the six-year record; directors' counsel notified.”
The Monitoring agent's computation, the Check agent's flag, Helen's edit and approval, Daniel's approval and Laura's release are each a row with who, what, when, why and the evidence — read-only and hash-chained. The program report for 2026 now reads ten notices, all inside 30 days, on day 16 on average; this one went out on day 4.
“Read-only · nothing here can be edited or deleted.”
The same exceedance, seen by four of the people who carry it — what the 30 days looked like, and what they look like now.
Seven agents compute, trace, draft and check every condition daily; the CCO and Treasurer approve, the liaison releases.
Computes transaction costs, cash and capital-gains distributions for every fund each morning from fund accounting, transfer-agency flows and trading-cost data, projects each to period end and calendar year end, and opens a case at a crossing.
Traces a crossing to class flows, intermediaries, trades and lots, quantifies each class's share, and runs the counterfactual the board will ask for.
Drafts the 30-day board notice from the case and the adviser's remediation plan — what was exceeded, the cause, the effect on each class, the remediation — and watches the clock, with reminders at day 20 and day 25.
Drafts initial adviser reports (condition 3), ongoing adviser reports (condition 6) and the draft best-interest findings, reading sub-adviser reports in Japanese or German with the English beside each passage.
Reads every draft notice, adviser report and finding against the order's conditions, prior notices, board minutes and the numbers before a person sees it.
Turns the adviser's remediation plan into tracked actions with owners and dates, and measures in the next period whether each fix moved the strip.
Keeps the six-year record, files board responses against their cases and builds evidence packs for an examination or internal audit.
Approve; the board liaison releases. The agents propose; a named person decides.
Ask about any fund, condition, case or board document — or tell the agents what to prepare. Every answer points to its source, and nothing changes until a person approves it.
Why did Mid Cap Value cross its capital-gains threshold?
Its October distribution was $0.62 on a $34.44 NAV, 1.80% against 1.50%. About 78% of the gains came from sales that met mutual-fund-class cash redemptions, $640 million of them from one intermediary.
Which funds could cross a threshold before year end?
Small Cap Growth's December distribution projects to 1.31% against 1.50%; International Equity transaction costs are at 7.1 of 8.0 bps; Emerging Markets Equity cash 2.60 of 3.0%. I will tell you at 1.40% for Small Cap Growth.
What if the $640M had been paid in kind?
Realized gains would have been about $50.7 million lower: $72.1 million, or $0.364 a share, 1.06% of NAV, below the 1.50% threshold. The Fund's policy already allows it for redemptions over $50 million.
Does Small Cap Value need its own notice?
Yes. It is a different fund and a different condition (cash 3.40% vs 3.0%), with its own 30-day clock, also due Nov 30. I can send both under one cover memo so the Board sees the shared cause; counsel asked about exactly that.
13 screens from the working solution, on its sample data. Pick one to see it large.
The rules every condition is checked against are settings, versioned and on the audit trail. The 30-day clock is the order's and is locked; thresholds are the board's.
| Setting | Default | Choose from |
|---|---|---|
| 30-day notice clock | From the end of the period in which a threshold was exceeded | Set by the order · locked |
| Monitoring period | Calendar month | Board-approved |
| Equity fund thresholds | 8.0 bps · 3.00% cash · 1.50% capital gains | Board-approved; a change goes to the CCO, the Treasurer, then the board |
| Watch band | From 80% of a threshold | Configurable |
| Reminder to approvers | Day 20 of 30 | Configurable |
| Escalation to the CCO and General Counsel | Day 25 of 30 | Configurable |
| Data hold | Never use a value older than one business day; hold and flag | Configurable |
| Cause confidence | Below 85% a person confirms before drafting | Configurable |
Every figure is labelled: a target the solution is built to, an estimate, a typical published result, or a proven one.
“demo” = seen in the working solution, on its sample data · “target” = the design goal, measured in the live solution · “estimated” = our estimate · “typical” = published figures (Dechert OnPoint, September 2025 — over 80 managers sought ETF share class relief; the SEC's ETF share class orders, first granted November 17, 2025 — the 30-day board notice in condition 5 and six-year records in condition 8). People, funds, tickers, intermediaries and firms named on this page are fictional — characters and sample data in the working solution.
ETF share class relief is the SEC exemptive relief, first granted on November 17, 2025, that lets a US mutual fund offer an ETF share class of the same portfolio — a dual share class structure — under conditions its board oversees. ETF Share Class Relief is the system that runs those conditions: seven agents compute transaction costs, cash and capital-gains distributions for every fund each day, trace each threshold crossing to its cause, and draft the 30-day board notice, the adviser reports and the draft best-interest findings with every figure cited. The Fund CCO and the Fund Treasurer approve, and the board liaison releases.
An initial adviser report before the board considers the plan; board best-interest findings before launch and at least every year after; a board-approved monitoring process with thresholds for portfolio transaction costs, cash and capital-gains distributions; a board notice within 30 days after any period in which a threshold was exceeded; an ongoing adviser report each year; and every report, finding and monitoring record kept six years, the first two easily accessible.
Within 30 days after the end of the period in which the threshold was exceeded, with an assessment of the cause and the adviser's recommended remediation. The solution starts the clock when the period ends, reminds approvers at day 20 and escalates to the CCO and General Counsel at day 25. In the sample year all ten notices reached the board inside 30 days.
Each morning the Monitoring agent computes every condition from fund accounting, transfer-agency flows and trading-cost data — 102 values for 34 funds in the sample — and shows each against its board threshold with a watch band from 80%. It projects each condition to period end and calendar year end, and holds any value whose source file is late rather than guess it.
The Cause agent attributes the crossing to the class flows, intermediaries, trades and lots behind it, puts a dollar figure on each class's share and runs the counterfactual the board will ask for. Below 85% confidence a person confirms the cause before the Notice agent drafts.
Yes. The Report agent drafts each fund's initial adviser report with the four elements of condition 3, the ongoing adviser report and the draft best-interest findings resolution, every figure cited. It reads sub-adviser reports in Japanese or German and puts the English beside each passage, pinned to its page. It never states a finding as made: the board makes it.
Yes. The agents draft, trace and check, and never approve, release or send. A preparer cannot approve their own work, the Fund CCO and the Fund Treasurer both approve with a reason code, only the board liaison releases, and thresholds change only when the board approves.
The Agentic Solution Engine builds and deploys it from your requirements and documents — your exemptive order, the board-approved monitoring procedures, the SAI and a sample of fund accounting and transfer-agent data — and it goes live once every quality gate has passed. We will walk you through it on your own funds first.
Every 15(c) answer cited and checked against last year, ready 10 days before the deadline.
1-min demoFee BenchmarkingEvery peer fee your board sees, cited to the peer’s own fee table and signed.
1-min demoFund Launch ManagementFirst NAV on the planned date: every slip caught early, re-planned and signed off.
1-min demoWe'll run ETF Share Class Relief on your own order, monitoring procedures and a sample of fund accounting and transfer-agent data.