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Correspondence 0000929638-25-000904 from SSGA Active Trust (CIK 0001516212)

SSGA Active Trust (CIK 0001516212)
Date: Feb. 28, 2025 · CIK: 0001516212 · Accession: 0000929638-25-000904

AI Filing Summary & Sentiment

File numbers found in text: 333-173276, 811-22542

Date
December 18, 2024
Author
Not clearly detected
Form
CORRESP
Company
SSGA Active Trust (CIK 0001516212)

Letter

via EDGAR Correspondence Division of Investment Management 100 F Street, N.E. Washington, D.C. 20549 Re: SSGA Active Trust (the “Registrant”); SEC File Nos. 333-173276 and 811-22542; Post-Effective Amendment No. 220 to the Registrant’s Registration Statement on Form N-1A (“Amendment No. 220”)

Dear Mr. Cowan:

This letter responds to comments you provided in an email correspondence on October 11, 2024, with respect to Amendment No. 220. Amendment No. 220 was filed on September 10, 2024, and included disclosure with respect to the SPDR SSGA Apollo IG Public & Private Credit ETF (the “Fund”), a new series of the Registrant, as set forth in the Fund’s Prospectus and Statement of Additional Information filed as part of Amendment No. 220.

Summaries of the comments with respect to the Fund, and responses thereto on behalf of the Registrant, are provided below. All page references refer to the pages in Amendment No. 220. Capitalized terms not defined herein should be given the meaning provided in Amendment No. 220.

Supplemental Questions and Requests for Information

1.

Comment: Please provide us with a copy of the Liquidity Agreement. To the extent the agreement does not, please also describe:

a.

how the parties will determine the actual price at which Apollo would buy the AOS Investments and how the intra-day executable bid is determined;

b.

what will be the daily limit(s) of Apollo’s obligation to provide executable quotations and/or repurchase AOS Investments, how such daily limit(s) will be determined, and what advance notice of the daily limit(s) the Adviser will receive;

c.

any qualifying circumstances under which Apollo would be exempt or excused from its obligation to buy (or sell) the AOS Investments; and

d.

if intra-day, executable bids represent a guarantee or commitment by the liquidity provider to purchase such investments. Is the contractual arrangement a credit enhancement on the AOS Investment for purposes of determination of “investment grade”?

Response: The Adviser will provide a copy of the Fund’s Liquidity Agreement supplementally.

a.

Apollo will transmit the bid price for an AOS Investment and the Adviser will determine whether it wishes to transact at that price on behalf of the Fund. Section 2(a) and (b) of the Liquidity Agreement (provided to the Staff supplementally) requires that Apollo transmit at least three Executable Quotation Sheets, each executable for fifteen minutes (the “Quote Windows”), on a daily basis. Each of the Executable Quotation Sheets will reflect bid prices based on Apollo’s commercially reasonable assessment of the value of each AOS Investment immediately preceding the publication of each such Executable Quotation Sheet. Section 2(b) of the Liquidity Agreement provides that, in determining the bid prices set forth in each Executable Quotation Sheet, Apollo may reference or rely in whole or part on quotes from non-affiliated parties, as well as take into account other factors, including, but not limited to, then-current market conditions, interest rates, any then-recent transactions for the same or similar securities, any recent levels communicated to similarly situated market participants, and any other then-current information deemed relevant by Apollo.

b.

The daily limit is set forth in Section 1 of the Liquidity Agreement between the Fund and Apollo. Apollo could repurchase more than the daily limit but is required to, at a minimum, repurchase an amount as determined in accordance with Section 1 of the Liquidity Agreement.

c.

The Liquidity Agreement requires that Apollo commence the repurchase of an AOS Investment for which it has published an Executable Quotation Sheet if the Fund has submitted a repurchase order for such AOS Investment during the corresponding Quote Window. As provided in Section 2(a) of the Liquidity Agreement between the Fund and Apollo, in no event will Apollo be required to bid or purchase an AOS Investment if such bid or purchase would cause Apollo to violate federal or state securities laws. In addition, under Section 5 of the Liquidity Agreement, which contains standard force majeure provisions, Apollo would not be liable for inadequate performance, including in respect of repurchases of AOS Investments, to the extent such performance is caused by a condition beyond Apollo’s control (e.g., natural disasters and/or internet disturbances). Outside of such circumstances, Apollo would be contractually obligated to perform its obligations under the Liquidity Agreement. Apollo does not have a contractual obligation under the Liquidity Agreement to sell any AOS Investments to any party.

d.

No, the Liquidity Agreement is not a credit enhancement. The Adviser notes, for the avoidance of doubt, that the rating and investment grade status of a particular AOS Investment is determined solely on the basis of the independent credit analysis of an independent rating agency based on its assessment of the creditworthiness of the obligor.

2.

Comment: Please discuss whether the Liquidity Agreement might be prohibited by Section 12(d)(3) of the Investment Company Act of 1940 (the “1940 Act”).

Response: The Liquidity Agreement is not prohibited by Section 12(d)(3) of the 1940 Act. The Fund may acquire issuances sourced by Apollo where Apollo is acting in its capacity as a broker-dealer. Apollo is not the issuer of the AOS Investments, rather, Apollo is acting as a broker-dealer sourcing AOS Investments that are issued by third-party obligors. The Fund will not be purchasing securities issued by Apollo, the broker-dealer, itself.

3.

Comment: Please provide or describe any additional written or oral agreement (and any other arrangement) between the Fund or the Adviser (or any of their affiliates) and Apollo (or any of its affiliates) related to the Fund.

Response: The Adviser has an agreement not to disclose certain confidential information provided by the parties. The Adviser and Apollo are in discussions regarding a potential revenue share agreement between the parties out of the Adviser’s legitimate profits generally.

For the avoidance of doubt, the only agreement between Apollo and the Fund is the Liquidity Agreement referenced above. The Adviser, and not the Fund, intends to enter into a license agreement with Apollo for the use of the Apollo name.

4.

Comment: The registration statement notes that “if Apollo is unable to meet its contractual obligation to provide firm bids for AOS Investments, the Fund’s assets that were deemed liquid by the Adviser may become illiquid.”

a.

Assuming for purposes of this question that Apollo’s contractual commitment can render the AOS investments liquid under rule 22e-4 of the 1940 Act, and considering the concentration of liquidity risk in a single counterparty that such an approach would raise, what remedial measures does the Fund’s Liquidity Risk Management Program under rule 22e-4 contemplate for situations where Apollo is not able to meet its contractual obligation to provide executable firm bids?

b.

Please also provide us with a copy of the Fund’s Liquidity Risk Management Program.

Response:

a.

The Liquidity Agreement and the ability to buy and sell AOS Investments with Apollo is not exclusive. Certain other broker-dealers may make markets and provide quotations for the AOS Investments, and the Adviser could and may seek to sell AOS Investments to any interested, willing, and eligible counterparty.

In addition, should there be a need for liquidity beyond what Apollo provides (for example, to satisfy redemption requests) the Fund will have a line of credit to facilitate settlement of redemptions.

Furthermore, the Fund retains the ability to redeem out authorized participants in-kind as an additional measure and utilize custom baskets when necessary.

b.

The Adviser will provide the Fund’s Liquidity Risk Management Program supplementally prior to the Fund’s launch.

5.

Comment: We note the Fund’s name includes a reference to Apollo. Given Apollo’s role as a liquidity provider to the Fund, please address why it is appropriate to include Apollo in the name of the Fund, including how the use of Apollo in the Fund’s name is not misleading under section 35(d) of the Investment Company Act. Please also provide us with a copy of the licensing agreement for the Fund’s use of Apollo’s name.

Response: Given the structure of the Fund and Apollo’s contractual obligation to purchase AOS Investments along with the clear disclosure in the registration statement setting forth Apollo’s role in sourcing AOS Investments for the Fund, the Adviser believes the use of Apollo’s name in the name of the Fund is descriptive and informative to investors and is not misleading under section 35(d).

Section 35(d) of the Investment Company Act of 1940, as amended (the “1940 Act”) prohibits a registered investment company from adopting as part of its name or title any word or words that the Commission finds are materially deceptive or misleading. As noted in the adopting release for the recent amendments to Rule 35d-1 under the 1940 Act (the “Fund Names Rule”) (the “2023 Adopting Release”), Congress provided the Commission with rulemaking authority to address materially deceptive or misleading fund names, “recognizing the concern that investors may focus on a fund’s name to determine its investments and risks.” Further, the 2023 Adopting Release states, “[f]und names offer important signaling for investors in assessing their investment options.” The foregoing, and the Commission’s related rulemaking, suggests that Congress’ primary intent was to prevent the use of words in fund names that mislead or deceive investors with respect to the investments and risks of a fund.

The Adviser notes that Apollo is well-known by the marketplace as having a significant focus on the private and fixed income markets, and is also known to source and originate private market assets, through its affiliates, including Apollo Global Securities, LLC. The use of “Apollo” in the Fund’s name is intended to be descriptive and informative to investors by signaling to investors that certain of the Fund’s investments are originated or sourced by Apollo, and to assist investors in “assessing their investment options” by reference to a well-known private market assets firm that is expected to source or originate a portion of the Fund’s investments.

The Adviser further notes that because Apollo is associated broadly with private market assets, as opposed to, for example, public market equity assets, and because Apollo would exclusively source or originate the AOS Investments, the Adviser believes that the use of “Apollo” in the Fund’s name does not have the tendency or capacity to deceive or mislead investors as to the investments or risks of the Fund. Generally, the Fund Names Rule

requires funds whose name suggests a focus on certain types of investments to, among other things, clarify through disclosure the adoption of certain investment policies and appropriately define the terms used in the fund’s name. While the use of “Apollo” in the Fund’s name does not itself trigger the applicability of such provisions of the Fund Names Rule, in order to comport with Section 35(d) of the 1940 Act and disclose information material to investors’ decision-making, the Fund has also clearly disclosed information about Apollo so as to avoid any confusion, including Apollo’s role in sourcing AOS Investments and its contractual obligations to the Fund to repurchase AOS Investments. For example, under “Additional Strategies Information”, disclosure states that “Apollo is not a sponsor, distributor, promoter or investment adviser to the Fund. Apollo has entered into a contractual agreement with the Fund whereby it is obligated to provide firm bids on AOS Investments to the Fund on a daily basis at certain intervals and is required to repurchase AOS Investments that the Fund has purchased at the firm bid price offered by Apollo.”

Given Apollo’s reputation in the private assets space, its exclusive role in the sourcing of AOS Investments and its contractual obligations to the Fund with respect to its investment program, as well as related prominent and clear disclosure regarding the nature and scope of Apollo’s involvement, the Adviser respectfully believes that the use of “Apollo” in the Fund’s name is not misleading or deceptive. The Adviser further believes that the use of “Apollo” in the Fund’s name does not have a tendency or capacity to deceive or mislead investors. Rather, the use of “Apollo” in the Fund’s name provides investors with useful information about a key service provider and the Fund’s investments in order to assist investors in assessing their investment options and determine the Fund’s investments and risks.

The Adviser, and not the Fund, intends to enter into a license agreement with Apollo for the use of the Apollo name. The Fund would receive a sub-license from the Adviser.

6.

Comment: Please describe all of the services, roles and functions that Apollo (or any of its affiliates) will perform, or have, with respect to the Fund. Does the Fund plan to engage with any other service provider that would serve a role similar to Apollo’s, including originating deals and committing to purchase portfolio securities?

Response: Apollo’s primary role with respect to the Fund will be as a broker sourcing potential private credit investments for the Adviser to consider as portfolio investments for the Fund. In addition, Apollo will serve as a non-exclusive “liquidity provider” pursuant to the Liquidity Agreement. The Adviser has not currently engaged with any other service provider that would serve in roles similar to Apollo’s but, from time to time, parties unaffiliated with Apollo may serve in similar capacities. For example, the Fund retains the ability to seek to sell AOS Investments to any interested, willing, and eligible counterparty at its discretion, including such arrangements facilitated by Apollo.

Neither role is exclusive to Apollo and the Fund. Other broker-dealers are able to source private credit investments and provide liquidity to the Fund.

7.

Comment: Please describe any direct or indirect compensation that Apollo or its affiliates will provide or receive from the Fund, the Adviser, or any of their aff

Show Raw Text
CORRESP
1
filename1.htm

    [Letterhead of Morgan, Lewis
      & Bockius LLP]

      via EDGAR Correspondence

    December 18, 2024

    Mr. Mark Cowan

    Division of Investment Management

    U.S. Securities and Exchange Commission

    100 F Street, N.E.

    Washington, D.C. 20549

          Re:

            SSGA Active Trust (the “Registrant”); SEC File Nos. 333-173276 and 811-22542; Post-Effective Amendment No. 220 to the Registrant’s Registration Statement on Form N-1A
              (“Amendment No. 220”)

    Dear Mr. Cowan:

    This letter responds to comments you provided in an email correspondence on October 11, 2024, with respect to Amendment No. 220. Amendment No. 220 was
      filed on September 10, 2024, and included disclosure with respect to the SPDR SSGA Apollo IG Public & Private Credit ETF (the “Fund”), a new series of the Registrant, as set forth in the Fund’s Prospectus and Statement of Additional Information
      filed as part of Amendment No. 220.

    Summaries of the comments with respect to the Fund, and responses thereto on behalf of the Registrant, are provided below. All page references refer to the
      pages in Amendment No. 220.  Capitalized terms not defined herein should be given the meaning provided in Amendment No. 220.

    Supplemental Questions and Requests for Information

          1.

            Comment: Please provide us with a copy of the Liquidity Agreement. To the extent the agreement does not, please also describe:

          a.

            how the parties will determine the actual price at which Apollo would buy the AOS Investments and how the intra-day executable bid is determined;

          b.

            what will be the daily limit(s) of Apollo’s obligation to provide executable quotations and/or repurchase AOS Investments, how such daily limit(s) will
              be determined, and what advance notice of the daily limit(s) the Adviser will receive;

          c.

            any qualifying circumstances under which Apollo would be exempt or excused from its obligation to buy (or sell) the AOS Investments; and

          d.

            if intra-day, executable bids represent a guarantee or commitment by the liquidity provider to purchase such investments. Is the contractual arrangement
              a credit enhancement on the AOS Investment for purposes of determination of “investment grade”?

    Response: The Adviser will
      provide a copy of the Fund’s Liquidity Agreement supplementally.

          a.

            Apollo will transmit the bid price for an AOS Investment and the Adviser will determine whether it wishes to transact at that price on behalf of the
              Fund.  Section 2(a) and (b) of the Liquidity Agreement (provided to the Staff supplementally) requires that Apollo transmit at least three Executable Quotation Sheets, each executable for fifteen minutes (the “Quote Windows”), on a daily
              basis.  Each of the Executable Quotation Sheets will reflect bid prices based on Apollo’s commercially reasonable assessment of the value of each AOS Investment immediately preceding the publication of each such Executable Quotation Sheet.
              Section 2(b) of the Liquidity Agreement provides that, in determining the bid prices set forth in each Executable Quotation Sheet, Apollo may reference or rely in whole or part on quotes from non-affiliated parties, as well as take into
              account other factors, including, but not limited to, then-current market conditions, interest rates, any then-recent transactions for the same or similar securities, any recent levels communicated to similarly situated market participants,
              and any other then-current information deemed relevant by Apollo.

          b.

            The daily limit is set forth in Section 1 of the Liquidity Agreement between the Fund and Apollo. Apollo could repurchase more than the daily limit but
              is required to, at a minimum, repurchase an amount as determined in accordance with Section 1 of the Liquidity Agreement.

          c.

            The Liquidity Agreement requires that Apollo commence the repurchase of an AOS Investment for which it has published an Executable Quotation Sheet if
              the Fund has submitted a repurchase order for such AOS Investment during the corresponding Quote Window. As provided in Section 2(a) of the Liquidity Agreement between the Fund and Apollo, in no event will Apollo be required to bid or
              purchase an AOS Investment if such bid or purchase would cause Apollo to violate federal or state securities laws.  In addition, under Section 5 of the Liquidity Agreement, which contains standard force majeure provisions, Apollo would not be
              liable for inadequate performance, including in respect of repurchases of AOS Investments, to the extent such performance is caused by a condition beyond Apollo’s control (e.g., natural disasters and/or internet disturbances).  Outside of
              such circumstances, Apollo would be contractually obligated to perform its obligations under the Liquidity Agreement.  Apollo does not have a contractual obligation under the Liquidity Agreement to sell any AOS Investments to any party.

      2

          d.

            No, the Liquidity Agreement is not a credit enhancement. The Adviser notes, for the avoidance of doubt, that the rating and investment grade status of a
              particular AOS Investment is determined solely on the basis of the independent credit analysis of an independent rating agency based on its assessment of the creditworthiness of the obligor.

          2.

            Comment: Please discuss whether the Liquidity Agreement might be prohibited by Section 12(d)(3) of the Investment Company Act of 1940 (the “1940 Act”).

            Response: The Liquidity Agreement is not prohibited by
              Section 12(d)(3) of the 1940 Act.  The Fund may acquire issuances sourced by Apollo where Apollo is acting in its capacity as a broker-dealer. Apollo is not the issuer of the AOS Investments, rather, Apollo is acting as a broker-dealer
              sourcing AOS Investments that are issued by third-party obligors. The Fund will not be purchasing securities issued by Apollo, the broker-dealer, itself.

          3.

            Comment: Please provide or describe any additional written or
              oral agreement (and any other arrangement) between the Fund or the Adviser (or any of their affiliates) and Apollo (or any of its affiliates) related to the Fund.

            Response: The Adviser has an agreement not to disclose certain confidential information provided by the parties. The Adviser and Apollo are in discussions regarding a potential revenue share agreement between the parties out of the Adviser’s legitimate profits generally.

            For the avoidance of doubt, the only agreement between Apollo and the Fund
                is the Liquidity Agreement referenced above. The Adviser, and not the Fund, intends to enter into a license agreement with Apollo for the
                use of the Apollo name.

          4.

            Comment: The registration statement notes that “if Apollo is
              unable to meet its contractual obligation to provide firm bids for AOS Investments, the Fund’s assets that were deemed liquid by the Adviser may become illiquid.”

          a.

            Assuming for purposes of this question that Apollo’s contractual commitment can render the AOS investments liquid under rule 22e-4 of the 1940 Act, and
              considering the concentration of liquidity risk in a single counterparty that such an approach would raise, what remedial measures does the Fund’s Liquidity Risk Management Program under rule 22e-4 contemplate for situations where Apollo is
              not able to meet its contractual obligation to provide executable firm bids?

          b.

            Please also provide us with a copy of the Fund’s Liquidity Risk Management Program.

    Response:

          a.

            The Liquidity Agreement and the ability to buy and sell AOS Investments with Apollo is not exclusive. Certain other broker-dealers may make markets and
              provide quotations for the AOS Investments, and the Adviser could and may seek to sell AOS Investments to any interested, willing, and eligible counterparty.

      3

            In addition, should there be a need for liquidity beyond what Apollo provides (for example, to satisfy redemption requests) the Fund will have a line of
              credit to facilitate settlement of redemptions.

            Furthermore, the Fund retains the ability to redeem out authorized participants in-kind as an additional measure and utilize custom baskets when
              necessary.

          b.

            The Adviser will provide the Fund’s Liquidity Risk Management Program supplementally prior to the Fund’s launch.

          5.

            Comment: We note the Fund’s name includes a reference to
              Apollo. Given Apollo’s role as a liquidity provider to the Fund, please address why it is appropriate to include Apollo in the name of the Fund, including how the use of Apollo in the Fund’s name is not misleading under section 35(d) of the
              Investment Company Act. Please also provide us with a copy of the licensing agreement for the Fund’s use of Apollo’s name.

            Response: Given the structure of the Fund and Apollo’s
              contractual obligation to purchase AOS Investments along with the clear disclosure in the registration statement setting forth Apollo’s role in sourcing AOS Investments for the Fund, the Adviser believes the use of Apollo’s name in the name
              of the Fund is descriptive and informative to investors and is not misleading under section 35(d).

            Section 35(d) of the Investment Company Act of 1940, as amended (the “1940 Act”) prohibits a registered investment company from adopting as part of its
              name or title any word or words that the Commission finds are materially deceptive or misleading.  As noted in the adopting release for the recent amendments to Rule 35d-1 under the 1940 Act (the “Fund Names Rule”) (the “2023 Adopting
              Release”), Congress provided the Commission with rulemaking authority to address materially deceptive or misleading fund names, “recognizing the concern that investors may focus on a fund’s name to determine its investments and risks.”
              Further, the 2023 Adopting Release states, “[f]und names offer important signaling for investors in assessing their investment options.”   The foregoing, and the Commission’s related rulemaking, suggests that Congress’ primary intent was to
              prevent the use of words in fund names that mislead or deceive investors with respect to the investments and risks of a fund.

            The Adviser notes that Apollo is well-known by the marketplace as having a significant focus on the private and fixed income markets, and is also known
              to source and originate private market assets, through its affiliates, including Apollo Global Securities, LLC.  The use of “Apollo” in the Fund’s name is intended to be descriptive and informative to investors by signaling to investors that
              certain of the Fund’s investments are originated or sourced by Apollo, and to assist investors in “assessing their investment options” by reference to a well-known private market assets firm that is expected to source or originate a portion
              of the Fund’s investments.

            The Adviser further notes that because Apollo is associated broadly with private market assets, as opposed to, for example, public market equity assets,
              and because Apollo would exclusively source or originate the AOS Investments, the Adviser believes that the use of “Apollo” in the Fund’s name does not have the tendency or capacity to deceive or mislead investors as to the investments or
              risks of the Fund.  Generally, the Fund Names Rule

      4

            requires funds whose name suggests a focus on certain types of investments to, among other things, clarify through disclosure the adoption of certain
              investment policies and appropriately define the terms used in the fund’s name.  While the use of “Apollo” in the Fund’s name does not itself trigger the applicability of such provisions of the Fund Names Rule, in order to comport with
              Section 35(d) of the 1940 Act and disclose information material to investors’ decision-making, the Fund has also clearly disclosed information about Apollo so as to avoid any confusion, including Apollo’s role in sourcing AOS Investments and
              its contractual obligations to the Fund to repurchase AOS Investments.  For example, under “Additional Strategies Information”, disclosure states that “Apollo is not a sponsor, distributor, promoter or investment adviser to the Fund.  Apollo
              has entered into a contractual agreement with the Fund whereby it is obligated to provide firm bids on AOS Investments to the Fund on a daily basis at certain intervals and is required to repurchase AOS Investments that the Fund has purchased
              at the firm bid price offered by Apollo.”

            Given Apollo’s reputation in the private assets space, its exclusive role in the sourcing of AOS Investments and its contractual obligations to the Fund
              with respect to its investment program, as well as related prominent and clear disclosure regarding the nature and scope of Apollo’s involvement, the Adviser respectfully believes that the use of “Apollo” in the Fund’s name is not misleading
              or deceptive.  The Adviser further believes that the use of “Apollo” in the Fund’s name does not have a tendency or capacity to deceive or mislead investors.  Rather, the use of “Apollo” in the Fund’s name provides investors with useful
              information about a key service provider and the Fund’s investments in order to assist investors in assessing their investment options and determine the Fund’s investments and risks.

            The Adviser, and not the Fund, intends to enter into a license agreement with Apollo for the use of the Apollo name. The Fund would receive a
              sub-license from the Adviser.

          6.

            Comment: Please describe all of the services, roles and
              functions that Apollo (or any of its affiliates) will perform, or have, with respect to the Fund. Does the Fund plan to engage with any other service provider that would serve a role similar to Apollo’s, including originating deals and
              committing to purchase portfolio securities?

            Response: Apollo’s primary role with respect to the Fund will
              be as a broker sourcing potential private credit investments for the Adviser to consider as portfolio investments for the Fund. In addition, Apollo will serve as a non-exclusive “liquidity provider” pursuant to the Liquidity Agreement.  The
              Adviser has not currently engaged with any other service provider that would serve in roles similar to Apollo’s but, from time to time, parties unaffiliated with Apollo may serve in similar capacities.  For example, the Fund retains the
              ability to seek to sell AOS Investments to any interested, willing, and eligible counterparty at its discretion, including such arrangements facilitated by Apollo.

            Neither role is exclusive to Apollo and the Fund. Other broker-dealers are able to source private credit investments and provide liquidity to the Fund.

          7.

            Comment: Please describe any direct or indirect compensation
              that Apollo or its affiliates will provide or receive from the Fund, the Adviser, or any of their aff