April 4 (Reuters) - Cboe Global Markets asked the SEC to

approve a rule change that would allow issuers to add an

exchange-traded fund share class to existing mutual funds, the

exchange said on Thursday.

If approved, asset managers could offer exposure to existing

mutual fund portfolios through an ETF, similar to the way they

make mutual fund share classes with different fees and other

features available now.

"Adding an exchange-traded share class gives investors more

options," said Rob Marrocco, global head of ETP listings at

Cboe.

SEC approval would allow issuers to more easily add ETF

products that share the record of an existing mutual fund rather

than launching new funds, analysts said.

"Both the number of ETFs and ETF assets could soar" if the

SEC approves Cboe's request, said Todd Sohn, ETF analyst at

Strategas LLC.

Vanguard Group's patent on the share class concept expired

in May 2023. Since then, eight other asset managers have sought

SEC approval to replicate the model, including Dimensional Fund

Advisors, Morgan Stanley ( MS ) and Fidelity.

Others, including T. Rowe Price and JP Morgan, have

expressed interest in this approach.

The Cboe filing "gives issuers an avenue to force the SEC to

respond to and engage with" their applications, said Bryan

Armour, ETF strategist at Morningstar. The SEC must approve or

reject Cboe's application within 240 days.

There's no guarantee the SEC will approve the application.

Morningstar's Armour noted the SEC already made one high-profile

decision by approving spot bitcoin ETFs and put the odds of the

Cboe winning approval this year at "a bit less than 50%."

But the exchange's willingness to join the battle alongside

asset managers may boost longer-term odds of winning the SEC's

blessing, Armour added.

"Ultimately, this is the direction in which things are

heading, and clearly Cboe is pushing to be in the lead," he

said.