Palm Beach Gardens, FL (October 2, 2025) — ExchangiFi today announced a major software update to its wealthtech platform, introducing an automated portfolio optimization engine designed to maximize tax deferral for clients pursuing Section 351 ETF exchanges. The update moves ExchangiFi beyond compliance checking into active optimization, giving advisors and ETF issuers a precise, data-driven roadmap for structuring each exchange.
Until now, the ExchangiFi platform helped users verify whether a proposed portfolio contribution would satisfy the diversification requirements under Section 351. The new optimization engine goes further, analyzing each client’s tax lots and calculating the exact number of shares from each position that should be contributed to maximize deferred capital gains while keeping the exchange in compliance.
Section 351 requires that no single position represent more than 25 percent of the market value of the contributed portfolio, and that the top five positions combined not exceed 50 percent. Meeting those thresholds is significantly more complex than it appears on paper. Under the Internal Revenue Code, ETFs and closed-end funds are treated on a look-through basis, meaning the market value attributed to each underlying stock held across those funds must be identified and combined with any direct holdings of that same stock across a client’s entire portfolio. Share classes of the same company must also be consolidated and treated as a single position. The result is a web of dependencies that makes manual optimization in spreadsheets extremely difficult and nearly impossible to scale across multiple clients as market prices move in real time.
The ExchangiFi optimization engine resolves that complexity automatically. The platform integrates multiple live financial market data feeds, applies the look-through analysis and share class consolidation rules across every position, and runs the optimization to identify the contribution structure that maximizes tax deferral within the diversification limits. It then produces a formatted output that preserves all original tax lot information required to execute the exchange, ready for submission to the ETF issuer, custodian, and Authorized Participant.
“This is the update that makes the platform truly powerful,” said Matthew Bucklin, Founder and President of ExchangiFi. “Advisors were already coming to us to check whether a proposed exchange would pass compliance. Now the platform tells them exactly how to structure it to get the best possible tax outcome for their client, down to the share level. That is a fundamentally different level of value.”
“The diversification rules sound straightforward until you try to apply them at scale,” said Ricardo Velasquez, Cofounder and Technical Advisor of ExchangiFi. “An advisor managing dozens of clients, each with different portfolios full of ETFs and multiple share classes, cannot do this in Excel. Prices change, positions change, and the math changes with them. We built the engine to handle all of that in real time and surface a clean, actionable answer.”
“What made the technical challenge interesting was not just the optimization itself but making sure the output remained fully usable downstream,” said Juan Trujillo, CTO of ExchangiFi. “The exchange still needs to happen after the optimization runs. Every tax lot, every cost basis, every share count needs to carry through correctly so the custodians and Authorized Participants can execute. We built the optimization and the formatting to work together as one continuous workflow.”
ExchangiFi has filed a patent application covering the platform and the underlying software methodology. The company continues to develop additional features for the platform ahead of broader market rollout.
# # #
About ExchangiFi, LLC ExchangiFi provides a platform that connects ETF issuers and wealth advisors for Section 351 ETF exchanges. Its software supports the transaction by helping participants optimize portfolios, manage documentation, track capital commitments, and coordinate fund seeding. ExchangiFi is designed for simplicity and ease of use so wealth advisors can serve their clients better. ExchangiFi provides software solutions only and does not offer tax, legal, or investment advice. For more information, visit https://exchangifi.com/.