Investment Company Act of 1940 – Sections 2(a)(32), 5(a)(1), 6(c), 17(a), 22(d) and 22(e), Rule 22c-1
Your letter of June 24, 2015 ( "Incoming Letter") requests our assurance that we would not recommend enforcement action to the Securities and Exchange Commission (the "Commission") under Sections 2(a)(32), 5(a)(1), 17(a), and 22(d) of the Investment Company Act of 1940 (the "Act") or Rule 22c-1 thereunder against SPDR Series Trust and SPDR Index Shares Funds (the "Trusts") or SSgA Funds Management, Inc. ("SSgA FM"), if, subject to the representations and conditions described in your letter, the definition of "Index" in the Applications includes "Long/Short Indexes." "Index" is currently defined in the applications relating to the exemptive orders (the "Applications") pursuant to which the individual series of the Trusts operate as exchange traded funds (the "Funds"). "Long/Short Indexes" are securities indexes composed of both long and short positions, including indexes that use a 130/30 or similar investment strategy. Your Incoming Letter states that you will not rely on your existing exemptive orders for index-based ETF relief or the assurances requested from the staff to offer, and are not asking the staff to take any position with respect to, any index-based Fund that operates in a manner that is similar to funds that are currently known as "leveraged," "inverse," "inverse leveraged," or "geared" funds.
Based on the facts and representations made in your letter and the conditions proposed by your letter, we would not recommend any enforcement action to the Commission under Sections 2(a)(32), 5(a)(1), 17(a), and 22(d) of the Act or Rule 22c-1 thereunder against the Trusts or SSgA FM if the Funds include Long/Short Indexes in the definition of the term "Index" as defined in the Applications.
In addition, we confirm that we have no objection if the Trusts issue shares of Funds in large aggregations ("Creation Units") that are smaller than the Creation Units described in the Applications (i.e., Creation Units less than 50,000 shares). Further, we confirm that the Trusts may comply with the disclosure requirements of Form N-1A instead of the disclosure-related conditions in the Applications, with the exception of representations related to relief from Section 22(e) of the Act.
This response expresses the Division's position on enforcement action only, and does not purport to express any legal conclusions on the questions presented. Facts or representations different from those presented in your letter might require a different conclusion.
Mark N. Zaruba