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CORRESP
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dcorresp.htm
CORRESPONDENCE FILING

Correspondence filing

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 [SHEARMAN & STERLING LLP LETTERHEAD]

 (212) 848-8519

 WRITER’S EMAIL ADDRESS:

 jennifer.berman@shearman.com

 September 16, 2004

 John Ganley, Esq.

 Division of Investment Management

 Securities and Exchange Commission

 450 Fifth Street, N.W.

 Washington, D.C. 20549

 S&P 500 GEARED Fund Inc. (the “Company”):

 Registration Statement File Nos. 333-118070 and 811-21611

Dear Mr. Ganley:

 As requested, attached is a copy of the email, including the most recent draft of their N-2, the Company submitted to you Monday, September 13, 2004, via
email.

Best regards,

/s/    JENNIFER E.
BERMAN

Jennifer E. Berman

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 [EMAIL DATED SEPTEMBER 13, 2004, 4:34 PM

 FROM: JENNIFER E. BERMAN

 TO: GANLEYJ@SEC.GOV

 SUBJECT: NEW PROOFS FOR FORM N-2/IQ S&P 500 GEARED FUND ARE ATTACHED]

 John,

 Thank you so much for taking the time to speak with us today. As discussed on the phone, we are attaching a draft of the N-2 which incorporates the
changes we discussed with you - in order to provide the clearest understanding for investors of how the Fund operates. We look forward to talking with you about the document. As discussed, we will be filing this draft of the N-2 as SEC
Correspondence. Please feel free to call me at (212) 848-8519 to discuss the draft.

 Thank you,

 Jennifer Berman

 Shearman & Sterling LLP

 — Forwarded by Jennifer E Berman/NY/NA/ShS on 09/13/2004 04:33 PM —

 [EMAIL DATED SEPTEMBER 13, 2004, 4:31 PM

 FROM: RR_DONNELLEY_FINANCIAL@SENDD.COM

 TO:
JENNIFER.BERMAN@SHEARMAN.COM

 SUBJECT: NEW PROOFS FOR FORM N-2/IQ S&P 500 GEARED FUND ARE ATTACHED]

 Donnelley Financial has new proofs ready for your review.

 Deal Name: Merrill Lynch & Co. Inc.

 Job
Name: Form N-2 / IQ S&P 500 GEARED Fund

 Site Phone: 212.341.7777

 Since you have elected to receive your proofs via an e-mailed attachment,

 you can view them by simply opening the attached file.

 ** To avoid delays or deletions of proofs caused by anti-virus and anti-spam software, or to alleviate electronic storage load on your systems, RR
Donnelley recommends receiving proofs through direct document hyperlinks rather than attachments.

 Try this mode by clicking on the
doclink below (beside “File Name:”) which will take you directly to your

 document (no login necessary) for reviewing or
downloading. **

 If you need assistance or you’d
like us to switch your profile to doclinks, please ask your Customer Service Representative.

 Type of Proof: Complete Clean Document

 File
Name: 18980acl.PDF

 Cycle Number: 010

 Type of Proof: Complete Document w/Composite Blacklines

 2

Table of Contents

 File Name: 18980acp.PDF

 Cycle Number: 010

 Workgroup
members receiving this email:

 JENNIFER.BERMAN@SHEARMAN.COM

 creynolds@shearman.com

**
Non-urgent requests for assistance accessing the SENDD service should be directed to support@sendd.com. URGENT REQUESTS FOR HELP MUST BE DIRECTED TO YOUR DONNELLEY FINANCIAL
CUSTOMER SERVICE REPRESENTATIVE. **

 *     *     *

 3

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 [THE FIRST ATTACHMENT TITLED “18980ACL.PDF” READS AS FOLLOWS:]

 As filed with the Securities and Exchange Commission on September [x], 2004

 Securities Act Registration No. 333-118070

 Investment Company Act File No. 811-21611

 U.S. SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

 FORM N-2

 (CHECK APPROPRIATE BOX OR BOXES)

x
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

 Pre-Effective Amendment No. 1

 and

x
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

 Amendment No. 1

 S&P 500 GEAREDSM Fund Inc.

 (Exact name of
Registrant as Specified in Charter)

 4 World Financial Center, 5th Floor, New York, NY 10080

 (Address of Principal Executive Offices)

 Registrant’s Telephone Number, including Area Code: (212) 449-8118

 Allan J. Oster, Esq.

 Vice President and Secretary

 IQ
Investment Advisors LLC

 4 World Financial Center, 5th Floor, New York, NY 10080

 (Name and address of Agent for Service)

 COPY TO:

 Margery K. Neale, Esq.

 Shearman & Sterling LLP

 599 Lexington Avenue

 New York, NY 10022-6069

 Leonard B. Mackey, Jr., Esq.

 Clifford Chance US LLP

 31 West 52nd Street

 New York, NY 10019

 Approximate Date of Proposed Public Offering: As soon as practicable after the effective date of the Registration
Statement.

 If any securities being registered on this form will be offered on
a delayed or continuous basis in reliance on Rule 415 under the Securities Act of 1933, other than securities offered in connection with a dividend reinvestment plan, check the following box. ¨

 It is
proposed that this filing will become effective (if appropriate, check box)

 ¨ when declared effective pursuant to section 8(c).

 If appropriate, check the following boxes:

 ¨ This [post-effective] amendment designates a new effective date for a previously filed [post-effective amendment] [registration statement.]

 ¨ This Form is
filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act and the Securities Act registration statement number of the earlier effective registration statement for the same offering is
                .

 CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933

Title of Securities Being Registered

Amount Being
Registered

 Proposed
Maximum
Offering

 Price Per Unit

Proposed
Maximum
Aggregate
Offering Price(1)

Amount of
Registration
Fee(2)

 Common Stock ($.001 par value per share)

1,000,000 Shares

$20.00

$
20,000,000

(1)
Estimated solely for the purpose of calculating the registration fee.

(2)
Transmitted prior to filing.

 The information required to be included in this Registration Statement by Part A and Part B of Form N-2 is contained in the Prospectus that follows. The
information required to be in this Registration Statement by Part C of Form N-2 follows the Prospectus.

 THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATES AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.

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 The information contained in this prospectus is not complete and may be changed. The Fund may not sell these
securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any State where the offer
or sale is not permitted.

 Subject To Completion Preliminary Prospectus Dated September     , 2004

S&P 500 GEAREDSM Fund Inc.

Common Stock

$20.00 per share

 S&P 500 GEAREDSM Fund Inc. (the “Fund”) is a corporation organized under the laws of the State of Maryland and registered with the U.S. Securities and Exchange Commission under the Investment Company Act of
1940 as a closed-end, non-diversified management investment company. The Fund will conduct its investment operations for a fixed term of approximately five years. The Fund has an interval fund structure, pursuant to which the Fund will conduct
annual repurchase offers for between 5% and 25% of the Fund’s outstanding shares.

 The Fund’s investment objective is to provide returns, exclusive of fees and expenses of the Fund, linked to the annual performance of the S&P 500 Composite Stock Price Index (the “S&P 500
Index” or “Index”), as described below. The investment objective differs depending on whether the S&P 500 Index has positive or negative performance for each annual period (approximately one year). Where the Index has negative
returns for an annual period, the Fund’s investment objective is to provide annual returns that track the performance of the Index on a one-for-one basis over the annual period. Where the performance of the Index is positive for an annual
period, the Fund’s investment objective is to deliver a “geared” return equal to approximately three times the performance of the Index up to a maximum index participation level (the “Maximum Index Participation”). The Fund
will not participate in any Index returns in excess of the Maximum Index Participation, and as a result the Fund’s performance over an annual period will be subject to a maximum annual return cap (the “Annual Return Cap”). The Fund
currently anticipates that the Maximum Index Participation for its first annual investment period will be between 3% and 4%, and accordingly that its Annual Return Cap will equal three times this amount, or 9% to 12%, respectively. In instances
where the return of the Index exceeds the Annual Return Cap, the Fund will under-perform the Index. See “Investment Strategy — Hypothetical Return Examples” on page of this prospectus. There can be no assurance that the Fund will
achieve its investment objective or be able to structure its Transactions as anticipated. The Fund is not intended as a complete investment program.

 The Fund will seek to achieve its objective by: (1) purchasing and managing a portfolio consisting of all of the securities that comprise the S&P 500
Index in the same proportions as the Index and/or other investments that track the performance of the Index; and (2) using a series of “option strategies” for each annual period (the “Transactions”). The Fund intends to
distribute all net income, if any, generated by the Transactions at least annually. See “Automatic Dividend Reinvestment Plan on page [            ] of this Prospectus.

 This Prospectus relates to the offering of securities of the Fund, which the
Fund intends to list on the New York Stock Exchange (“NYSE”) under the ticker symbol “GRE”. Shares of closed-end investment companies that are listed on an exchange, such as those of the Fund, frequently trade at prices that
reflect a discount from their net asset values. If you purchase the Fund’s shares in its initial public offering or otherwise and sell the shares on the NYSE or otherwise, you may receive an amount that is less than: (1) the amount you paid for
the shares; and/or (2) the net asset value of the Fund’s shares at the time of sale. The Fund is a newly formed entity and has no previous operating or trading history upon which you can evaluate the Fund’s performance.

 Investing in the Fund involves certain risks. The Fund, by engaging in
Transactions, may forego the opportunity to benefit fully from potential increases in the value of the Index, but would continue to bear the risk of declines in the value of the investments purchased to track the performance of the Index. The
Fund’s investment strategy involves the use of call options and other derivatives which involve risks different from, and possibly greater than, the risks associated with investing directly in the investments underlying these instruments. The
Fund also will be exposed to the risk that counterparties to its investments, for whatever reason, will be unable to meet their obligations. INVESTING IN THE FUND’S SHARES INVOLVES CERTAIN RISKS. SEE “RISK FACTORS AND SPECIAL
CONSIDERATIONS” ON PAGE [    ] OF THIS PROSPECTUS.

Per Share

Total (3)

 Public Offering Price

$
20.00

[$
 ]

 Sales Load (1)

$
0.90

[$
 ]

 Proceeds to the Fund (Before Expenses) (2)

$
19.10

[$
 ]

(1)
The Fund has agreed to pay its underwriters $.00667 per share of common stock as a partial reimbursement of expenses incurred in connection with the offering. See
“Underwriting” on page [    ] of this Prospectus.

(2)
The total organizational and offering expenses to be incurred by the Fund are estimated to be [$    ].

(3)
The underwriters have an option to purchase up to an additional [    ] shares of the Fund at the Public Offering Price, less the Sales Load, within 45 days of
the date of this Prospectus to cover any overallotments. If the underwriters exercise this option in full, the total Public Offering Price, Sales Load, and estimated offering expenses and proceeds, after expenses, to the Fund will be
[$            ], [$            ], [$            ], and
[$            ], respectively. See “Underwriting” on page [    ] of this Prospectus.

 Neither the Securities and Exchange Commission nor any state securities
commission has determined whether this Prospectus is truthful or complete, nor have they made, nor will they make, any determination as to whether anyone should purchase these securities. Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved these securities. Any representation to the contrary is a criminal offense.

 This Prospectus provides information that you should know about the Fund before investing. Please read this Prospectus carefully and keep it for future
reference. Information required to be in the Fund’s Statement of Additional Information is found in this Prospectus.

 Merrill Lynch & Co.

 The date of this Prospectus is [             ] [    ], 2004.

 “GEARED” and “Geared-Equity Accelerated Return” are service marks of
Merrill Lynch & Co.

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TABLE OF CONTENTS

Page

Summary of Terms

1

Summary of Fund Expenses

10

The Fund

11

The Offering

11

Use of Proceeds

11

Investment Objective

12

Investment Strategy

12

Risk Factors and Special Considerations

16

Listing of Shares

25

Investment Restrictions

26

Annual Repurchases of Securities

27

Directors and Officers

28

Investment Advisory and Management Arrangements

31

Proxy Voting Policies and Procedures

33

U.S. Federal Income Tax Considerations

34

Automatic Dividend Reinvestment Plan

37

Conflicts of Interest

38

Net Asset Value

40

Portfolio Transactions

41

Code of Ethics

43

Underwriting

44

Description of Securities

46

Transfer Agent and Custodian

49

Fiscal Year

49

Accountants and Legal Counsel

49

Privacy Principles of the Fund

49

Inquiries

49

Appendix A: Description of Ratings Criteria

A-1

Appendix B: Proxy Voting Policies and Procedures

B-1

Part C: Other Information

C-1

Exhibit Index

D-1

 You should rely only on the information contained or incorporated by reference in this Prospectus. The Fund has not, and
the underwriters have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. The Fund is not, and the underwriters are not, making an
offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information provided by this Prospectus is accurate as of any date other than the date on the front of this Prospectus. The
Fund’s business, financial condition and results of operations may have changed since the date of this Prospectus.

 Information about the Fund can be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-202-942-8090 for information on
the operation of the public reference room. This information also is available on the SEC’s Internet site at http://www.sec.gov and copies may be obtained upon payment of a duplicating fee by writing the Public Reference Section of the SEC, 450
Fifth Street, NW, Washington, D.C. 20549-0102.

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SUMMARY OF TERMS

 The
following provides a summary of certain information contained in this Prospectus relating to the S&P GEAREDSM Fund Inc. and its shares and does not contain all of the information that you should consider before investing in the Fund or purchasing its shares. The information is qualified in all respects by the more detailed information
included elsewhere in this Prospectus and in the appropriate Registration Statements filed with the U.S. Securities and Exchange Commission.

 T