Compliance March 24, 2007

Most Tell SPARK They’re Ready for 22c-2

Nearly all recordkeepers say they’ll be ready for the Securities and Exchange Commission's (SEC) Rule 22c-2 deadline of April 16.
Reported by

Ninety percent of retirement plan intermediaries said they will have signed Information Sharing Agreements with their largest mutual fund trading partners in time to meet the SEC deadline. About half (53%) of those intermediaries will conduct intermediary monitoring in order to facilitate compliance, according to a study by the SPARK Institute.

However, only 68% of respondents to the survey said they had signed agreements with at least one-half of their top 50 trading partners as of March 13, 2007, the Institute said in a press release. Although none of the respondents considered any of their top 10 relationships to be at risk of termination, about 10% of the intermediaries said they considered an average of 5 of their top 50 trading relationships to be at significant risk, mostly due to lack of response or agreements from certain fund companies.

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As part of that information sharing, more than two-thirds (68%) of retirement plan intermediaries will supply full Social Security numbers in their regular information reports. The rest will provide either partial Social Security numbers or a unique identifier.

84% of intermediaries will either charge a fee or will seek reimbursement for some expenses associated with Rule 22c-2 compliance.

The SEC put the finishing touches on the rule, which helps funds enforce bans against market timing and other abusive trading practices, in September 2006.

More information can be found at www.sparkinstitute.org.

Products March 24, 2007

Six New SPDR ETFs Emerge at State Street

The investment management arm of State Street Corporation has added six emerging markets exchange-traded funds (ETF) to its SPDRs ETF lineup.
Reported by

According to the announcement, the six ETFs, which began trading on the American Stock Exchange on Friday, are based on the S&P/Citigroup Global Equity Indices.

The new offerings are:

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  • SPDR S&P Emerging Markets ETF (GMM): Index includes more than 1,500 companies across 26 emerging countries.
  • SPDR S&P Emerging Latin America ETF (GML): Index includes companies domiciled in Argentina, Brazil, Chile, Columbia, Mexico, Peru, and Venezuela.
  • SPDR S&P Emerging Middle East & Africa ETF (GAF): Index includes companies domiciled in Egypt, Israel, Jordan, Morocco, Nigeria, and South Africa.
  • SPDR S&P Emerging Europe ETF (GUR): Index features companies in countries that are nearing acceptance into the EU, including Czech Republic, Hungary, Poland, Russia, and Turkey.
  • SPDR S&P Emerging Asia Pacific ETF (GMF): Index includes companies domiciled in China, India, Indonesia, Malaysia, Pakistan, the Philippines, Taiwan, and Thailand.
  • SPDR S&P China ETF (GXC): Underlying index includes over 150 companies domiciled in China

“Developed in response to investor demand, our new international SPDRS provide distinct exposure to virtually the entire emerging markets universe, several key regions, including China,” said James Ross, senior managing director of State Street Global Advisors, in the announcement. “The regional SPDRS are designed to provide a level of diversification unavailable in more concentrated country-specific approaches, and the SPDR S&P China ETF covers a much larger range of the Chinese equity market than any of the country’s other benchmarks.”

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