(Reuters) -The U.S. Securities and Exchange Commission cleared the way for Dimensional Fund Advisors to launch an exchange-traded fund share class on 13 of its existing mutual funds, according to a notice on the regulator's website late on Monday afternoon.

This removes the last remaining hurdle facing DFA in its bid to become the first new player to offer ETF share classes of existing mutual funds in more than two decades, and is likely to clear the way for approval of dozens of similar applications by other asset managers.

Vanguard, the first and so far the only asset manager to offer an ETF share class ranking alongside similar mutual fund share classes aimed at institutional or retail clients or financial advisors, had a 20-year patent on the product that expired in 2023. DFA rapidly followed the expiry of that patent with its SEC application, which received preliminary approval at the end of September.

DFA had sought the green light to offer a share class option on 13 of its existing mutual funds, although an individual familiar with the application said the firm is not likely to forge ahead with all of these at once and that the first launches may not happen until early 2026.

The move will "deliver meaningful benefits to mutual fund shareholders," said Eric Pan, president and chairman of the Investment Company Institute, an industry group.

Advocates of the initiative, ranging from industry groups to asset managers hoping to grab a larger share of the rapidly growing ETF market, have pushed for the measure as a way to offer lower-cost and potentially more tax-efficient ways to access existing mutual funds since the issuers could pool operating and distribution costs.

"Share classes allow investors to choose the investment strategy that best suits their needs as a first-order consideration, and then select their ideal wrapper to access that strategy," Gerard O'Reilly, co-CEO and co-CIO of DFA, said in a press release.

(Reporting by Suzanne McGee; Editing by Lincoln Feast.)