The US Securities & Exchange Commission (SEC) sounded the alarm about aspects of the first broad private credit market exchange-traded fund, in a letter posted on its website on Thursday, hours after the ETF began trading.
In what analysts and other asset management firms described as a highly unusual move, Brent Fields, associate director of the SEC’s division of investment management, asked State Street Global Advisors to address what it described as “significant outstanding issues” involving the SPDR SSGA Apollo IG Public & Private Credit ETF.
Fields declined to comment further. A spokesperson for the SEC declined to comment on questions involving any specific issuer.
State Street said it will be responding to the SEC’s letter but had no further comment at present.
“This is a very unusual event,” said Todd Sohn, ETF analyst at Strategas. “It’s also very odd timing, given that the ETF has already launched and is trading.”
Typically, sweeping questions of the kind raised in the letter are resolved before an ETF launches.
As reported earlier by Bloomberg News, the SEC raised concerns about the fund’s liquidity and State Street’s ability to comply with SEC valuation rules. Regulators also asked State Street to remove the name of Apollo Global Management from the name of the ETF as including it is “misleading” in context of Apollo’s involvement.