Nasdaq Wants to Give New ETFs a Smoother Launch Day

Nasdaq filed a rule change on April 7 to expand its Exchange-Traded Product (ETP) definition to include Class ETF Shares, a hybrid product that blends mutual fund and ETF structures. The amendment to Equity 1, Section 1(a)(15) would let issuers of these products use the exchange’s optional Initial ETP Open process on their first day of trading. What the Rule Change Means for ETF Issuers Class ETF Shares are exchange-traded shares issued by open-end funds that also offer traditional mutual fund share classes. The SEC approved Nasdaq’s generic listing standards for these products in November 2025 under Rule 5703. Separately, the SEC approved Nasdaq’s Initial ETP Open in May 2025. That process gives ETP issuers the option to delay a security’s opening from Pre-Market Hours at 4:00 a.m. ET until regular Market Hours at 9:30 a.m. ET. #NASDAQ approves SR-NASDAQ-2025-011 allowing for market halts on ETP launch days like ETFs. Expect many crypto ETP and ETF launches in upcoming months.https://t.co/Ad3HYaLb5d pic.twitter.com/lN2JQTgxkq— MartyParty (@martypartymusic) February 3, 2025 The delay allows the Nasdaq Halt Cross to set an opening price, supporting more orderly price discovery. Until now, only ETPs listed under existing Nasdaq rules could access that functionality. The new filing adds Rule 5703 to the list, extending the same option to Class ETF Shares. A Growing Pipeline of Dual-Class Funds The filing arrives as asset managers race to bring dual-class funds to market. The SEC has approved roughly 48 firms for multi-class ETF exemptive relief out of approximately 100 applications filed as of March 2026. Major names including BlackRock, Fidelity, JPMorgan, and Morgan Stanley have all submitted applications. However, operational infrastructure still lags behind regulatory progress. The DTCC’s automated solution for processing mutual fund-to-ETF share exchanges is not expected to go live until May 18, 2026. Full custodian and market maker buildouts may not follow unt...