State Street Global Advisors is close to filing for exemptive relief with the Securities and Exchange Commission, essentially asking the agency for permission to equitize, or reinvest, the dividends in the SPDR product, according to industry sources. The firm is also expected to ask the commission for permission to engage in stock lending.
The SPDR, the oldest exchange-traded fund, hasn't significantly changed its structure since it began trading in 1993. The move, according to industry sources, is designed to keep the product competitive as newer S&P 500 ETFs, which are able to both reinvest dividends and lend out underlying shares, begin trading. 'When the change is approved, and I'm confident that it will be,' said one person close to the situation, 'there will be no significant difference in terms of structure between the SPDR and the BGI S&P 500 funds-or for that matter a Vanguard fund when its launched.' A SSgA spokesman confirmed that the firm is 'talking with the SEC,' but said that it has not formally filed. Both measures are considered benign changes by the firm, he said, but acknowledged that competitors seem to talk up those two points.