SPDR TRUST SERIES 1 (Form: 485BPOS, Received: 01/28/2005 17:07:26)

Net asset value of the Trust

Fee as a percentage of
net asset value of the Trust

$0 – $499,999,999

10/100 of 1% per annum plus or minus the Adjustment Amount

$500,000,000 – $2,499,999,999

8/100 of 1% per annum plus or minus the Adjustment Amount

$2,500,000,000 – and above

6/100 of 1% per annum plus or minus the Adjustment Amount






   As filed with the Securities and Exchange Commission on January 28, 2005

                                                               File No. 33-46080
                                                                        811-7330
================================================================================



                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549



                         POST EFFECTIVE AMENDMENT NO. 15



                                       TO

                                    FORM S-6

              FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF
                 SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED
                                 ON FORM N-8B-2

     A.   Exact name of Trust:

          SPDR TRUST SERIES 1

     B.   Name of Depositor:

          PDR  SERVICES LLC

     C.   Complete address of Depositor's principal executive office:

          PDR SERVICES LLC
          c/o AMERICAN STOCK EXCHANGE LLC
          86 Trinity Place
          New York, New York 10006

     D.   Name and complete address of agent for service:

          Michael J. Ryan, Jr.
          PDR SERVICES LLC
          c/o AMERICAN STOCK EXCHANGE LLC
          86 Trinity Place
          New York, New York 10006

          Copy to:


          Kathleen H. Moriarty, Esq.
          CARTER LEDYARD & MILBURN LLP
          2 Wall Street
          New York, New York 10005











         E. Title and amount of securities being registered:

         An indefinite number of units of Beneficial Interest pursuant to Rule
24f-2 under the Investment Company Act of 1940.

         F. Proposed maximum aggregate offering price to the public of the
securities being registered:

            Indefinite pursuant to Rule 24f-2

         G. Amount of filing fee:




            In accordance with Rule 24f-2, a fee in the amount of $629,447 was
paid on December 30, 2004 in connection with the filing of the Rule 24f-2 Notice
for the Trust's most recent fiscal year.



         H. Approximate date of proposed sale to public:

            AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE REGISTRATION
STATEMENT.


            [X] Check box if it is proposed that this filing will become
effective on January 28, 2005 at 3:00 p.m. pursuant to paragraph (b) of Rule
485.


================================================================================











                               SPDR TRUST SERIES 1

                              Cross Reference Sheet

                            Pursuant to Regulation C
                  Under the Securities Act of 1933, as amended

                  (Form N-8B-2 Items required by Instruction 1
                          as to Prospectus in Form S-6)

Form N-8B-2                                           Form S-6
Item Number                                           Heading in Prospectus
-----------                                           ---------------------




                     I. Organization and General Information
                        ------------------------------------

 1.   (a)    Name of Trust...............             Prospectus Front Cover
      (b)    Title of securities issued..             Prospectus Front Cover

 2.   Name, address and Internal
      Revenue Service Employer
      Identification Number of
      depositor.......................                Sponsor

 3.   Name, address and Internal
      Revenue Service Employer
      Identification Number of
      trustee.........................                Trustee

 4.   Name, address and Internal
      Revenue Service Employer
      Identification Number
      of principal underwriter........                *

 5.   State of organization of Trust..                Summary - Highlights

 6.   (a) Dates of execution and
          termination of Trust
          Agreement...................                Essential Information

      (b) Dates of execution and
          termination of Trust
          Agreement...................                Same as set forth in 6(a)

 7.   Changes of name.................                   *

 8.   Fiscal Year.....................                   *

 9.   Material Litigation.............                   *


----------

*Not applicable, answer negative or not required.



                                        i








                      II. General Description of the Trust
                           and Securities of the Trust
                          --------------------------------

10.  (a) Registered or bearer


         securities..................              Securities Depository,
                                                      Book-Entry-Only System

     (b)    Cumulative or distributive..              Summary - Essential
                                                      Information as of

     (c)    Rights of holders as to
            withdrawal or redemption....              Redemption of SPDRs

     (d)    Rights of holders as to
            conversion, transfer, etc...              Rights of Beneficial
                                                      Owners

     (e)    Lapses or defaults in
            principal payments with
            respect to periodic payment
            plan certificates...........              *

     (f)    Voting rights...............              Rights of Beneficial
                                                      Owners

     (g)    Notice to holders as to
            change in:

            (1) Composition of Trust
                assets..................              *

            (2) Terms and conditions
                of Trust's securities...              Administration of the
                                                      Trust - Amendments to
                                                      the Trust Agreement

            (3) Provisions of Trust
                Agreement...............              Same as set forth in
                                                      10(g)(2)

            (4) Identity of depositor
                and trustee.............              Sponsor; Trustee

----------

*Not applicable, answer negative or not required.



                                       ii










      (h) Consent of holders
          required to change:

          (1) Composition of Trust
              assets...................              *

          (2) Terms and conditions
              of Trust's securities....              Administration of the Trust
                                                     - Amendments to the
                                                     Trust Agreement
          (3) Provisions of Trust
              Agreement................               Same as set forth in
                                                      10(h)(2)

          (4) Identity of depositor
              and trustee..............               Sponsor; Trustee

        (i)    Other principal
               features of the securities...          The Trust

11. Type of securities
    comprising units.................                 The Portfolio

12. Certain information regarding
    securities comprising periodic
    payment certificates.............                 *

13. (a)   Certain information regarding
          loads, fees, expenses
          and charges..................              Expenses of the Trust;
                                                     Redemption of SPDRs

    (b)   Certain information regarding
          periodic payment plan
          certificates.................              *

    (c)   Certain percentages..........              Same as set forth in 13(a)

    (d)   Reasons for certain
          differences in prices........              *

    (e)   Certain other loads, fees, or
          charges payable by holders...              *


----------

*Not applicable, answer negative or not required.



                                       iii










    (f)  Certain profits receivable
         by depositor, principal
         underwriters, custodian,
         trustee or affiliated
         persons......................               Adjustments to the
                                                     Portfolio Deposit

    (g)  Ratio of annual charges and
         deductions to income.........               *

14. Issuance of Trust's securities...                The Trust - Creation of
                                                     Creation Units

15. Receipt and handling of
    payments from purchasers.........                The Trust

16. Acquisition and disposition of
    underlying securities............                The Trust - Creation of
                                                     Creation Units; The
                                                     Portfolio; Administration
                                                     of the Trust

17. (a)  Withdrawal or redemption by
         holders......................               Administration of the Trust
                                                     - Rights of Beneficial
                                                     Owners; Redemption of SPDRs
    (b)  Persons entitled or required
         to redeem or repurchase
         securities...................               Same as set forth in 17(a)

    (c)  Cancellation or resale of
         repurchased or redeemed
         securities...................               Same as set forth in 17(a)

18. (a)  Receipt, custody and
         disposition of income........               Administration of the Trust
                                                     - Distributions to
                                                     Beneficial Owners

    (b)  Reinvestment of distribu-
         tions........................               *

    (c)  Reserves or special funds....               Same as set forth in 18(a)

    (d)  Schedule of distributions....               *

----------

*Not applicable, answer negative or not required.



                                       iv










19. Records, accounts and reports..                  The S&P Index; Distribution
                                                     of SPDRs; Expenses of the
                                                     Trust; Administration of
                                                     the Trust

20. Certain miscellaneous provi-
    sions of Trust Agreement

    (a)    Amendments.................               Administration of the Trust
                                                     - Amendments to the Trust
                                                     Agreement

    (b)    Extension or termination...               Administration of the Trust
                                                     - Amendments to the Trust
                                                     Agreement; - Termination
                                                     of the Trust Agreement

    (c)    Removal or resignation of
           trustee....................               Trustee

    (d)    Successor trustee..........               Same as set forth in 20(c)

    (e)    Removal or resignation of
           depositor..................               Sponsor

    (f)    Successor depositor........               Same as set forth in 20(e)

21. Loans to security holders......                  *

22. Limitations on liabilities.....                  Trustee; - Sponsor

23. Bonding arrangements...........                  *

24.     Other material provisions of
        Trust Agreement................              *



                        III. Organization, Personnel and


                             Affiliated Persons of Depositor
                             -------------------------------

25. Organization of depositor......                   Sponsor

26. Fees received by depositor.....                   *

----------

*Not applicable, answer negative or not required.



                                        v










27. Business of depositor..........                   Sponsor

28. Certain information as to
    officials and affiliated
    persons of depositor...........                   Sponsor

29. Ownership of voting securities
    of depositor...................                   Sponsor

30. Persons controlling depositor..                   *

31. Payments by depositor for
    certain services rendered
    to Trust.......................                   *

32. Payments by depositor for
    certain other services
    rendered to Trust..............                   *

33. Remuneration of employees of
    depositor for certain
    services rendered to Trust.....                   *

34. Compensation of other persons
    for certain services rendered
    to Trust.......................                   *





                  IV. Distribution and Redemption of Securities
                      -----------------------------------------

35. Distribution of Trust's
    securities in states...........                   *

36. Suspension of sales of Trust's
    securities.....................                   *

37. Denial or revocation of
    authority to distribute........                   *

38. (a)    Method of distribution.....                The Trust - Creation of
                                                      Creation Units

    (b)    Underwriting agreements....                Summary - Highlights

    (c)    Selling agreements.........                Same as set forth in
                                                      38(b)


----------

*Not applicable, answer negative or not required.



                                       vi










39. (a)    Organization of principal
           underwriter................                Summary - Highlights

    (b)    NASD membership of
           principal underwriter......                Summary - Highlights

40. Certain fees received by
    principal underwriters.........                   *

41. (a)    Business of principal
           underwriters...............                Summary - Highlights

    (b)    Branch offices of
           principal underwriters.....                *

    (c)    Salesmen of principal
           underwriters...............                *

42. Ownership of Trust's securities
    by certain persons.............                   *

43. Certain brokerage commissions
    received by principal
    underwriters...................                   *

44. (a)    Method of valuation for
           determining offering price.                The Portfolio; Valuation

    (b)    Schedule as to components of
           offering price.............                *

    (c)    Variation in offering
           price to certain persons...                *

45. Suspension of redemption
    rights.........................                   *

46. (a)    Certain information
           regarding redemption or
           withdrawal valuation.......                Valuation; Redemption of
                                                      SPDRs

    (b)    Schedule as to components
           of redemption price........                *

----------

*Not applicable, answer negative or not required.



                                       vii










47. Maintenance of position in
    underlying securities..........                   The Trust; The Portfolio;
                                                      Distribution of SPDRs;
                                                      Valuation; Administration
                                                      of the Trust





               V. Information Concerning the Trustee or Custodian
                  -----------------------------------------------

48. Organization and regulation of
    trustee........................                   Trustee

49. Fees and expenses of trustee...                   Expenses of the Trust;
                                                      Redemptions of SPDRs

50. Trustee's lien.................                   Expenses of the Trust;
                                                      Redemption of SPDRs






          VI. Information Concerning Insurance of Holders of Securities
              ---------------------------------------------------------



51. (a)    Name and address of
           insurance company...........               *

    (b)    Types of policies...........               *

    (c)    Types of risks insured and
           excluded....................               *

    (d     Coverage....................               *

    (e)    Beneficiaries...............               *

    (f)    Terms and manner of
           cancellation................               *

    (g)    Method of determining
           premiums....................               *

    (h)    Aggregate premiums paid.....               *

    (i)    Recipients of premiums......               *

    (j)    Other material provisions
           of Trust Agreement relating
           to insurance................               *

----------

*Not applicable, answer negative or not required.



                                      viii










                            VII. Policy of Registrant
                                 --------------------

52. (a)    Method of selecting and
           eliminating securities from
           the Trust...................               The Trust - Creation of
                                                      Creation Units; The
                                                      Portfolio; Administration
                                                      of the Trust

    (b)    Elimination of securities
           from the Trust..............               *

    (c)    Policy of Trust regarding
           substitution and elimina-
           tion of securities..........               Same as set forth in
                                                      52(a)

    (d)    Description of any other
           fundamental policy of the
           Trust.......................               *

    (e)    Code of Ethics pursuant to                 Code of Ethics
           Rule 17j-1 of the 1940 Act..

53. (a)    Taxable status of the Trust.               Tax Status of the Trust

    (b)    Qualification of the Trust
           as a regulated investment
           company.....................               Same as set forth in
                                                      53(b)





                   VIII. Financial and Statistical Information
                         -------------------------------------

54. Information regarding the
    Trust's last ten fiscal years...                 *

55. Certain information regarding
    periodic payment plan certifi-
    cates...........................                 *

56. Certain information regarding
    periodic payment plan certifi-
    cates...........................                 *

57. Certain information regarding
    periodic payment plan certifi-
    cates...........................                 *

----------

*Not applicable, answer negative or not required.



                                       ix










58. Certain information regarding
    periodic payment plan certifi-
    cates...........................                  *

59. Financial statements
    (Instruction 1(c) to Form S-6)..                  *






                                        x






                           Undertaking to File Reports
                           ---------------------------

          Subject to the terms and conditions of Section 15(d) of the Securities
          Exchange Act of 1934, the undersigned registrant hereby undertakes to
          file with the Securities and Exchange Commission such supplementary
          and periodic information, documents, and reports as may be prescribed
          by any rule or regulations of the Commission heretofore or hereafter
          duly adopted pursuant to authority conferred in that section.

Prospectus

STANDARD & POOR'S DEPOSITARY RECEIPTS ®

("SPDRs")

SPDR Trust, Series 1
(A Unit Investment Trust)

•

SPDR Trust is an exchange traded fund designed to generally correspond to the price and yield performance of the S&P 500® Index.

•

SPDR Trust holds all of the S&P 500 Index stocks.

•

Each SPDR represents an undivided ownership interest in the SPDR Trust.

•

The SPDR Trust issues and redeems SPDRs only in multiples of 50,000 SPDRs in exchange for S&P 500 Index stocks and cash.

•

Individual SPDRs trade on the American Stock Exchange like any other equity security.

•

Minimum trading unit: 1 SPDR.

SPONSOR: PDR SERVICES LLC
(Solely Owned by American Stock Exchange LLC)

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES NOR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

Prospectus Dated January 28, 2005

STANDARD & POOR'S DEPOSITARY RECEIPTS ("SPDRs®")
SPDR TRUST, SERIES 1


TABLE OF CONTENTS
Summary				1
Essential Information as of September 30, 2004				1
Highlights				3
Risk Factors				11
Report of Independent Registered Public Accounting Firm				15
Statement of Assets and Liabilities				16
Statements of Operations				17
Statements of Changes in Net Assets				18
Financial Highlights				19
Notes to Financial Statements				20
Schedule of Investments				25
The Trust				31
Creation of Creation Units				31
Procedures for Creation of Creation Units				32
Placement of Creation Orders Using SPDR Clearing Process				34
Placement of Creation Orders Outside SPDR Clearing Process				34
Securities Depository; Book-Entry-Only System				35
Redemption of SPDRs				37
Procedures for Redemption of Creation Units				37
Placement of Redemption Orders Using SPDR Clearing Process				40
Placement of Redemption Orders Outside SPDR Clearing Process				40
The Portfolio				40
Portfolio Securities Conform to the S&P 500 Index				41

TABLE OF CONTENTS cont'd


Adjustments to the Portfolio Deposit				44
The S&P 500 Index				46
License Agreement				48
Exchange Listing				49
Tax Status of the Trust				50
Income Tax Consequences to Beneficial Owners				50
ERISA Considerations				53
Continuous Offering of SPDRs				54
Dividend Reinvestment Service				54
Expenses of the Trust				55
Trustee Fee Scale				57
Valuation				58
Administration of the Trust				59
Distributions to Beneficial Owners				59
Statements to Beneficial Owners; Annual Reports				61
Rights of Beneficial Owners				61
Amendments to the Trust Agreement				61
Termination of the Trust Agreement				62
Sponsor				63
Trustee				65
Depository				66
Legal Opinion				66
Independent Registered Public Accounting Firm				66
Code of Ethics				66
Information and Comparisons Relating to Trust, Secondary Market Trading, Net Asset Size, Performance and Tax Treatment				67
Glossary				74

"S&P®", "S&P 500®", "Standard & Poor's 500®", "Standard & Poor's Depositary Receipts®" and "SPDRs®" are trademarks of The McGraw-Hill Companies, Inc. PDR Services LLC and American Stock Exchange LLC are permitted to use these trademarks pursuant to a "License Agreement" with Standard & Poor's, a division of The McGraw-Hill Companies, Inc. SPDR Trust, Series 1, is not, however, sponsored by or affiliated with Standard & Poor's or The McGraw-Hill Companies, Inc.

SUMMARY

Essential Information as of September 30, 2004*


Glossary:				All defined terms used in this Prospectus and page numbers on which their definitions appear are listed in the Glossary on page 74.
Total Trust Assets:				$45,981,815,181
Net Trust Assets:				$45,715,924,958
Number of SPDRs:				408,979,824
Fractional Undivided Interest in the Trust Represented by each SPDR:				1/408,979,824th
Dividend Record Dates:				Quarterly, on the second (2nd) Business Day after the third Friday in each of March, June, September and December.
Dividend Payment Dates:				Quarterly, on the last Business Day of April, July, October and January.
Trustee's Annual Fee:				From 6/100 of one percent to 10/100 of one percent, based on the NAV of the Trust, as the same may be adjusted by certain amounts.
Estimated Ordinary Operating Expenses of the Trust:				10/100 of one percent (0.10%) (after a waiver of a portion of Trustee's annual fee).**
NAV per SPDR (based on the value of the Portfolio Securities, other net assets of the Trust and number of SPDRs outstanding):				$111.78
Evaluation Time:				Closing time of the regular trading session on the New York Stock Exchange, Inc. (ordinarily 4:00 p.m. New York time).
Licensor:				Standard & Poor's, a division of The McGraw-Hill Companies, Inc.


Mandatory Termination Date:				The Trust is scheduled to terminate no later than January 22, 2118, but may terminate earlier under certain circumstances.
Discretionary Termination:				The Trust may be terminated if at any time the value of the securities held by the Trust is less than $350,000,000, as adjusted for inflation. The Trust may also be terminated under other circumstances.
Fiscal Year End:				September 30
Market Symbol:				SPDRs trade on the American Stock Exchange under the symbol "SPY".
CUSIP:				78462F103

*	The Trust Agreement became effective, the initial deposit was made and the Trust commenced operation on January 22, 1993.

Ordinary operating expenses of the Trust currently are being accrued at an annual rate of 0.1000%. Last year's operating expenses were 0.1282%, but the excess over 0.1200% was waived by the Trustee, until April 19, 2004 when the excess over 0.1000% was waived by the Trustee, and, after earnings credits of 0.0029% were applied, the net expenses of the Trust were 0.1078%. Future accruals will depend primarily on the level of the Trust's net assets and the level of Trust expenses. The Trustee has agreed to waive a portion of its fee until February 1, 2006, but may thereafter discontinue this voluntary waiver policy. The Sponsor has undertaken that the ordinary operating expenses of the Trust will not exceed an amount that is 0.1845% of the daily NAV of the Trust, but this amount may be changed. Therefore, there is no guarantee that the Trust's ordinary operating expenses will not exceed the current 0.1000% or 0.1845% of the Trust's daily NAV.

Highlights

• SPDRs are Ownership Interests in the SPDR Trust

SPDR Trust, Series 1 ("Trust") is a unit investment trust that issues securities called "Standard & Poor's Depositary Receipts" or "SPDRs." The Trust is organized under New York law and is governed by an amended and restated trust agreement between State Street Bank and Trust Company ("Trustee") and PDR Services LLC ("Sponsor"), dated as of January 1, 2004 and effective as of January 27, 2004, as amended, ("Trust Agreement"). The Trust is an investment company registered under the Investment Company Act of 1940. SPDRs represent an undivided ownership interest in a portfolio of all of the common stocks of the Standard & Poor's 500 Composite Stock Price Index® ("S&P 500 Index").

•	SPDRs Should Closely Track the Value of the Stocks Included in the S&P 500 Index

SPDRs intend to provide investment results that, before expenses, generally correspond to the price and yield performance of the S&P 500 Index. Current information regarding the value of the S&P 500 Index is available from market information services. Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P") obtains information for inclusion in, or for use in the calculation of, the S&P 500 Index from sources S&P considers reliable. None of S&P, the Sponsor, the Trust or the Exchange accepts responsibility for or guarantees the accuracy and/or completeness of the S&P 500 Index or any data included in the S&P 500 Index.

The Trust holds the Portfolio and cash and is not actively "managed" by traditional methods, which typically involve effecting changes in the Portfolio on the basis of judgments made relating to economic, financial and market considerations. To maintain the correspondence between the composition and weightings of stocks held by the Trust ("Portfolio Securities" or, collectively, "Portfolio") and component stocks of the S&P 500 Index ("Index Securities"), the Trustee adjusts the Portfolio from time to time to conform to periodic changes in the identity and/or relative weightings of Index Securities. The Trustee aggregates certain of these adjustments and makes changes to the Portfolio at least monthly or more frequently in the case of significant changes to the S&P 500 Index. Any change in the identity or weighting of an Index Security will result in a corresponding adjustment to the prescribed Portfolio Deposit effective on any day that the New York Stock Exchange ("NYSE") is open for business ("Business Day") following the day on which the change to the S&P 500 Index takes effect after the close of the market.

The value of SPDRs fluctuates in relation to changes in the value of the Portfolio. The market price of each individual SPDR may not be identical to the net asset value ("NAV") of such SPDR but, historically, these two valuations have been very close.

• SPDRs Trade on the American Stock Exchange

SPDRs are listed for trading on the American Stock Exchange ("Exchange" or "AMEX"), and are bought and sold in the secondary market like ordinary shares of stock at any time during the trading day. SPDRs are traded on the Exchange in 100 SPDR round lots, but can be traded in odd lots of as little as one SPDR. The Exchange may halt trading of SPDRs under certain circumstances.

• Brokerage Commissions on SPDRs

Secondary market purchases and sales of SPDRs are subject to ordinary brokerage commissions and charges.

• The Trust Issues and Redeems SPDRs in "Creation Units"

The Trust issues and redeems SPDRs only in specified large lots of 50,000 SPDRs or multiples thereof referred to as "Creation Units." Creation Units are issued by the Trust to anyone who, after placing a creation order with ALPS Distributors, Inc. ("Distributor"), deposits with the Trustee a specified portfolio of Index Securities and a cash payment generally equal to dividends (net of expenses) accumulated up to the time of deposit.

Fractional Creation Units may be created or redeemed only in limited circumstances.* Creation Units are redeemable in kind only and are not redeemable for cash. Upon receipt of one or more Creation Units, the Trust delivers to the redeeming holder a portfolio of Index Securities (based on NAV of the Trust), together with a cash payment. Each redemption has to be accompanied by a Cash Redemption Payment that on any given Business Day is an amount identical to the Cash Component of a Portfolio Deposit.

If the Trustee determines that one or more Index Securities are likely to be unavailable, or available in insufficient quantity, for delivery upon creation of Creation Units, the Trustee may permit the cash equivalent value of one or more of these Index Securities to be included in the Portfolio Deposit as a part of the Cash Component in lieu thereof. If a creator is restricted by regulation or otherwise from investing or engaging in a transaction in one or more Index Securities, the Trustee may permit the cash equivalent value of such Index Securities to be included in the Portfolio Deposit based on the market value of such Index Securities as of the Evaluation Time on the date such creation order is deemed received by the Distributor as part of the Cash Component in lieu of the inclusion of such Index Securities in the stock portion of the Portfolio Deposit. If the Trustee determines that one or more Index Securities are likely

*	See, however, the discussion of termination of the Trust in this Summary and "Dividend Reinvestment Service," for a description of the circumstances in which SPDRs may be redeemed or created by the Trustee in less than a Creation Unit size aggregration of 50,000 SPDRs.

to be unavailable or available in insufficient quantity for delivery by the Trust upon the redemption of Creation Units, the Trustee may deliver the cash equivalent value of one or more of these Index Securities, based on their market value as of the Evaluation Time on the date the redemption order is deemed received by the Trustee, as part of the Cash Redemption Payment in lieu thereof.

• Creation Orders Must be Placed with the Distributor

All orders to create Creation Units must be placed with the Distributor. To be eligible to place these orders, an entity or person must be (a) a "Participating Party," or (b) a DTC Participant, and in each case must have executed an agreement with the Distributor and the Trustee ("Participant Agreement"). The term "Participating Party" means a broker-dealer or other participant in the SPDR Clearing Process, through the Continuous Net Settlement ("CNS") System of the National Securities Clearing Corporation ("NSCC"), a clearing agency registered with the Securities and Exchange Commission ("SEC"). Payment for orders is made by deposits with the Trustee of a portfolio of securities, substantially similar in composition and weighting to Index Securities, and a cash payment in an amount equal to the Dividend Equivalent Payment, plus or minus the Balancing Amount. "Dividend Equivalent Payment" is an amount equal, on a per Creation Unit basis, to the dividends on the Portfolio (with ex-dividend dates within the accumulation period), net of expenses and accrued liabilities for such period (including, without limitation, (i) taxes or other governmental charges against the Trust not previously deducted, if any, and (ii) accrued fees of the Trustee and other expenses of the Trust (including legal and auditing expenses) and other expenses not previously deducted), calculated as if all of the Portfolio Securities had been held for the entire accumulation period for such distribution. The Dividend Equivalent Payment and the Balancing Amount collectively are referred to as "Cash Component" and the deposit of a portfolio of securities and the Cash Component collectively are referred to as a "Portfolio Deposit." Persons placing creation orders with the Distributor must deposit Portfolio Deposits either (i) through the CNS clearing process of NSCC, as such processes have been enhanced to effect creations and redemptions of Creation Units, such processes referred to herein as the "SPDR Clearing Process," or (ii) with the Trustee outside the SPDR Clearing Process ( i.e. through the facilities of DTC).

The Distributor acts as underwriter of SPDRs on an agency basis. The Distributor maintains records of the orders placed with it and the confirmations of acceptance and furnishes to those placing such orders confirmations of acceptance of the orders. The Distributor also is responsible for delivering a prospectus to persons creating SPDRs. The Distributor also maintains a record of the delivery instructions in response to orders and may provide certain other administrative services, such as those related to state securities law compliance.

The Distributor is a corporation organized under the laws of the State of Colorado and is located at 1625 Broadway, Suite 2200, Denver, CO 80202, toll free number: 1-800-843-2639. The Distributor is a registered broker-dealer and a member of the National Association of Securities Dealers, Inc. PDR Services LLC, as Sponsor of the Trust, pays the Distributor for its services a flat annual fee. The Sponsor will not seek reimbursement for such payment from the Trust without obtaining prior exemptive relief from the SEC.

• Expenses of the Trust

The expenses of the Trust are accrued daily and reflected in the NAV of the Trust. After reflecting waivers but before reflecting credits, the Trust currently is accruing ordinary operating expenses at an annual rate of 0.1000%.


Shareholder Fees:*				None*
(fees paid directly from your investment)

Estimated Trust Annual Ordinary Operating Expenses:


Current Trust Annual Ordinary Operating Expenses	As a % of Trust Net Assets
Trustee's Fee		0.0614	%
S&P License Fee		0.0350	%
Registration Fees		0.0005	%
Marketing		0.0300	%
Other Operating Expenses		0.0013	%
Total:		0.1282	%
Trustee Waiver**		(0.0282	)%
Net Expense After Waiver		0.1000	%
Trustee Reduction for Balance Credits**		(0.0029	)%
Net Expenses after Waivers and Reductions		0.0971	%

Future expense accruals will depend primarily on the level of the Trust's net assets and the level of expenses.

Investors do not pay shareholder fees directly from their investment, but purchases and redemptions of Creation Units are subject to Transaction Fees (described below in "A Transaction Fee is Payable For Each Creation and For Each Redemption of Creation Units"), and purchases and sales of SPDRs in the secondary market are subject to ordinary brokerage commissions and charges (described above in "Brokerage Commissions on SPDRs").

The Trustee Waiver has been restated to reflect the current waiver level. Until February 1, 2006, the Trustee has agreed to waive a portion of its fee to the extent operating expenses exceed 0.1000%. Thereafter, the Trustee may discontinue this voluntary waiver policy. Therefore, there is no guarantee that the Trust's ordinary operating expenses will not exceed

0.1000% of the Trust's daily NAV. Trust expenses were further reduced by a Trustee's earnings credit of 0.0029% of the Portfolio's daily NAV as a result of uninvested cash balances in the Trust.

• Bar Chart and Table

The bar chart below and the table on the next page entitled "Average Annual Total Returns (for periods ending December 31, 2004)" ("Table") provide some indication of the risks of investing in the Trust by showing the variability of the Trust's returns based on net assets and comparing the Trust's performance to the performance of the S&P 500 Index. Past performance (both before and after tax) is not necessarily an indication of how the Trust will perform in the future.

The after-tax returns presented in the Table are calculated using the highest historical individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Your actual after-tax returns will depend on your specific tax situation and may differ from those shown below. After-tax returns are not relevant to investors who hold SPDRs through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The total returns in the bar chart below, as well as the total and after-tax returns presented in the Table, do not reflect Transaction Fees payable by those persons purchasing and redeeming Creation Units, nor do they reflect brokerage commissions incurred by those persons purchasing and selling SPDRs in the secondary market (see footnotes (3) and (4) to the Table).

This bar chart shows the performance of the Trust for each full calendar year since its inception on January 22, 1993. During the period shown above (January 1, 1994 through December 31, 2004), the highest quarterly return for the Trust was 21.21% for the quarter ended December 31, 1998, and the lowest was −17.26% for the quarter ended September 30, 2002.

(1)

Total return figures are calculated assuming the reinvested price for the 12/17/04 income distribution is the 12/31/04 NAV. The actual reinvestment price is the 1/31/05 NAV, which was not available at the time of the above calculations. Actual performance calculations may or may not differ based on this assumption.

Average Annual Total Returns (for periods ending December 31, 2004)


	Past One Year			Past Five Years			Past Ten Years			Since Inception ⁽⁵⁾
SPDR Trust, Series 1
Return Before Taxes ^(1)(2)(3)(4)		10.76	%		−2.38	%		11.89	%		10.83	%
Return After Taxes on Distributions ^(1)(2)(3)(4)		10.03	%		−2.85	%		11.27	%		10.12	%
Return After Taxes on Distributions and Redemption of Creation Units ^(1)(2)(3)(4)		6.97	%		−2.28	%		10.26	%		9.26	%
S&P 500 Index ⁽⁶⁾		10.88	%		−2.30	%		12.07	%		11.00	%

(1)

(2)	Includes all applicable ordinary operating expenses set forth above in the section of "Highlights" entitled "Expenses of the Trust".

(3)

Does not include the Transaction Fee which is payable to the Trustee only by persons purchasing and redeeming Creation Units as discussed below in the section of "Highlights" entitled "A Transaction Fee is Payable For Each Creation and For Each Redemption of Creation Units". If these amounts were reflected, returns would be less than those shown.

(4)

Does not include brokerage commissions and charges incurred only by persons who make purchases and sales of SPDRs in the secondary market as discussed above in the section of "Highlights" entitled "Brokerage Commissions on SPDRs". If these amounts were reflected, returns would be less than those shown.

(5)	Investment operation commenced on January 22, 1993.

(6)	Does not reflect deductions for taxes, operating expenses, Transaction Fees, brokerage commissions, or fees of any kind.

SPDR TRUST, SERIES 1

GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION ⁽¹⁾

1	Past performance is not necessarily an indication of how the Trust will perform in the future.

2	Effective as of September 30, 1997 the Trust's fiscal year end changed from December 31 to September 30.

•	A Transaction Fee is Payable for Each Creation and for Each Redemption of Creation Units

The transaction fee payable to the Trustee in connection with each creation and redemption of Creation Units made through the SPDR Clearing Process ("Transaction Fee") is non-refundable, regardless of the NAV of the Trust. This Transaction Fee is the lesser of $3,000 or 10/100 of one percent (10 basis points) of the value of one Creation Unit at the time of creation ("10 Basis Point Limit") per Participating Party per day, regardless of the number of Creation Units created or redeemed on such day. The Transaction Fee is currently $3,000.

For creations and redemptions outside the SPDR Clearing Process, an additional amount not to exceed three (3) times the Transaction Fee applicable for one Creation Unit is charged per Creation Unit per day. Under the current schedule, therefore, the total fee charged in connection with creation or redemption outside the SPDR Clearing Process would be $3,000 (the Transaction Fee for the creation or redemption of one Creation Unit) plus an additional amount up to $9,000 (3 times $3,000), for a total not to exceed $12,000. Creators and redeemers restricted from engaging in transactions in one or more Index Securities may pay the Trustee the Transaction Fee and may pay an additional amount per Creation Unit not to exceed three (3) times the Transaction Fee applicable for one Creation Unit.

• SPDRs are Held in Book Entry Form Only

The Depository Trust Company ("DTC") or its nominee is the record or registered owner of all outstanding SPDRs. Beneficial ownership of SPDRs is shown on the records of DTC or its participants. Individual certificates are not issued for SPDRs. See "The Trust—Depository; Book-Entry-Only System."

• SPDRs Make Periodic Dividend Payments

SPDR holders receive on the last Business Day of April, July, October and January an amount corresponding to the amount of any cash dividends declared on the Portfolio Securities during the applicable period, net of fees and expenses associated with operation of the Trust, and taxes, if applicable. Because of such fees and expenses, the dividend yield for SPDRs is ordinarily less than that of the S&P 500 Index. Investors should consult their tax advisors regarding tax consequences associated with Trust dividends, as well as those associated with SPDR sales or redemptions.

Quarterly distributions based on the amount of dividends payable with respect to Portfolio Securities and other income received by the Trust, net of fees and expenses, and taxes, if applicable, are made via DTC and its participants to Beneficial Owners on each Dividend Payment Date. Any capital gain income recognized by the Trust in any taxable year that is not previously treated as distributed during the year ordinarily is to be distributed at least annually in January of the following taxable year. The Trust may make additional distributions shortly after the end of the year in order to satisfy certain distribution requirements imposed by the Internal Revenue Code of 1986, as amended ("Code"). Although all distributions are currently made quarterly, the Trustee may vary the periodicity with which distributions are made. Those Beneficial Owners interested in reinvesting their quarterly distributions may participate through DTC Participants in the DTC Dividend Reinvestment Service ("Service") available through certain brokers. See "The Trust—Depository; Book-Entry-Only System."

• The Trust Intends to Qualify as a Regulated Investment Company

For the fiscal year ended September 30, 2004, the Trust believes that it qualified for tax treatment as a "regulated investment company" under Subchapter M of the Code. The Trust intends to continue to so qualify and to distribute annually its entire investment company taxable income and net capital gain. Distributions that are taxable as ordinary income to Beneficial Owners generally are expected to constitute qualified dividend income eligible (i) for the new maximum 15% tax rate for non-corporate taxpayers through 2008 and (ii) for federal income tax purposes for the dividends-received deduction available to many corporations to the extent of qualified dividend income received by the Trust. The Trust's regular quarterly distributions are based on the dividend performance of the Portfolio during such quarterly

distribution period rather than the actual taxable income of the Trust. As a result, a portion of the distributions of the Trust may be treated as a return of capital or a capital gain dividend for federal income tax purposes or the Trust may be required to make additional distributions to maintain its status as a regulated investment company or to avoid imposition of income or excise taxes on undistributed income.

• Termination of the Trust

The Trust has a specified lifetime term. The Trust is scheduled to terminate on the first to occur of (a) January 22, 2118 or (b) the date 20 years after the death of the last survivor of eleven persons named in the Trust Agreement, the oldest of whom was born in 1990 and the youngest of whom was born in 1993. Upon termination, the Trust may be liquidated and pro rata shares of the assets of the Trust, net of certain fees and expenses, distributed to holders of SPDRs.

• Restrictions on Purchases of SPDRs by Investment Companies

Purchases of SPDRs by investment companies are subject to restrictions set forth in Section 12(d)(1) of the Investment Company Act of 1940. The Trust has received an SEC order that permits registered investment companies to invest in SPDRs beyond these limits, subject to certain conditions and terms. One such condition is that registered investment companies relying on the order must enter into a written agreement with the Trust. Registered investment companies wishing to learn more about the order and the agreement should telephone 1-800-THE-AMEX.

The Trust itself is also subject to the restrictions of Section 12(d)(1). This means that (a) the Trust cannot invest in any registered investment company, to the extent that the Trust would own more than 3% of that regulated investment company's outstanding share position, (b) the Trust cannot invest more than 5% of its total assets in the securities of any one registered investment company, and (c) the Trust cannot invest more than 10% of its total assets in the securities of registered investment companies in the aggregate.

Risk Factors

Investors can lose money by investing in SPDRs. Investors should carefully consider the risk factors described below together with all of the other information included in this Prospectus before deciding to invest in SPDRs.

Investment in the Trust involves the risks inherent in an investment in any equity security. An investment in the Trust is subject to the risks of any investment in a broadly based portfolio of common stocks, including the risk that the general level of stock prices may decline, thereby adversely affecting

the value of such investment. The value of Portfolio Securities may fluctuate in accordance with changes in the financial condition of the issuers of Portfolio Securities (particularly those that are heavily weighted in the S&P 500 Index), the value of common stocks generally and other factors. The identity and weighting of Index Securities and the Portfolio Securities also change from time to time.

The financial condition of the issuers may become impaired or the general condition of the stock market may deteriorate (either of which may cause a decrease in the value of the Portfolio and thus in the value of SPDRs). Common stocks are susceptible to general stock market fluctuations and to volatile increases and decreases in value as market confidence in and perceptions of their issuers change. These investor perceptions are based on various and unpredictable factors including expectations regarding government, economic, monetary and fiscal policies, inflation and interest rates, economic expansion or contraction, and global or regional political, economic and banking crises.

Holders of common stocks of any given issuer incur more risk than holders of preferred stocks and debt obligations of the issuer because the rights of common stockholders, as owners of the issuer, generally are inferior to the rights of creditors of, or holders of debt obligations or preferred stocks issued by, such issuer. Further, unlike debt securities that typically have a stated principal amount payable at maturity, or preferred stocks that typically have a liquidation preference and may have stated optional or mandatory redemption provisions, common stocks have neither a fixed principal amount nor a maturity. Common stock values are subject to market fluctuations as long as the common stock remains outstanding. The value of the Portfolio may be expected to fluctuate over the entire life of the Trust.

There can be no assurance that the issuers of Portfolio Securities will pay dividends. Distributions generally depend upon the declaration of dividends by the issuers of Portfolio Securities and the declaration of such dividends generally depends upon various factors, including the financial condition of the issuers and general economic conditions.

The Trust is not actively managed. The Trust is not actively "managed" by traditional methods, and therefore the adverse financial condition of an issuer will not result in the elimination of its stocks from the Portfolio unless the stocks of such issuer are removed from the S&P 500 Index.

A liquid trading market for certain Portfolio Securities may not exist. Although most of the Portfolio Securities are listed on a national securities exchange, the principal trading market for some may be in the over-the-counter market. The existence of a liquid trading market for certain Portfolio Securities may depend on whether dealers will make a market in such stocks. There can be no assurance that a market will be made for any Portfolio Securities, that any market will be maintained or that any such market will be

or remain liquid. The price at which Portfolio Securities may be sold and the value of the Portfolio will be adversely affected if trading markets for Portfolio Securities are limited or absent.

The Trust may not always be able exactly to replicate the performance of the S&P 500 Index. It is possible that, for a short period, the Trust may not fully replicate the performance of the S&P 500 Index due to the temporary unavailability of certain Index Securities in the secondary market or due to other extraordinary circumstances. In addition, the Trust is not able to replicate exactly the performance of the S&P 500 Index because the total return generated by the Portfolio is reduced by Trust expenses and transaction costs incurred in adjusting the actual balance of the Portfolio.

Investment in the Trust may have adverse tax consequences. Investors in the Trust should also be aware that there are tax consequences associated with the ownership of SPDRs resulting from the distribution of Trust dividends and sales of SPDRs as well as under certain circumstances the sales of stocks held by the Trust in connection with redemptions.

NAV may not always correspond to market price. The NAV of SPDRs in Creation Unit size aggregations and, proportionately, the NAV per SPDR, changes as fluctuations occur in the market value of Portfolio Securities. Investors should be aware that the aggregate public trading market price of 50,000 SPDRs may be different from the NAV of a Creation Unit ( i.e. , 50,000 SPDRs may trade at a premium over, or at a discount to, the NAV of a Creation Unit) and similarly the public trading market price per SPDR may be different from the NAV of a Creation Unit on a per SPDR basis. This price difference may be due, in large part, to the fact that supply and demand forces at work in the secondary trading market for SPDRs is closely related to, but not identical to, the same forces influencing the prices of Index Securities trading individually or in the aggregate at any point in time. Investors also should note that the size of the Trust in terms of total assets held may change substantially over time and from time to time as Creation Units are created and redeemed.

The Exchange may halt trading in SPDRs. SPDRs are listed for trading on the Exchange under the market symbol SPY. Trading in SPDRs may be halted due to market conditions or, in light of Exchange rules and procedures, for reasons that, in the view of the Exchange, make trading in SPDRs inadvisable. In addition, trading is subject to trading halts caused by extraordinary market volatility pursuant to Exchange "circuit breaker" rules that require trading to be halted for a specified period based on a specified market decline. There can be no assurance that the requirements of the Exchange necessary to maintain the listing of SPDRs will continue to be met or will remain unchanged. The Trust will be terminated if SPDRs are delisted from the Exchange.

SPDRs are subject to market risks. SPDRs are subject to the risks other than those inherent in an investment in equity securities, discussed above, in that

the selection of the stocks included in the Portfolio, the expenses associated with the Trust, or other factors distinguishing an ownership interest in a trust from the direct ownership of a portfolio of stocks may affect trading in SPDRs.

The regular settlement period for Creation Units may be reduced. Except as otherwise specifically noted, the time frames for delivery of stocks, cash, or SPDRs in connection with creation and redemption activity within the SPDR Clearing Process are based on NSCC's current "regular way" settlement period of three (3) days during which NSCC is open for business (each such day an "NSCC Business Day"). NSCC may, in the future, reduce such "regular way" settlement period, in which case there may be a corresponding reduction in settlement periods applicable to SPDR creations and redemptions.

Clearing and settlement of Creation Units may be delayed or fail. The Trustee delivers a portfolio of stocks for each Creation Unit delivered for redemption substantially identical in weighting and composition to the stock portion of a Portfolio Deposit as in effect on the date the request for redemption is deemed received by the Trustee. If redemption is processed through the SPDR Clearing Process, the stocks that are not delivered are covered by NSCC's guarantee of the completion of such delivery. Any stocks not received on settlement date are marked-to-market until delivery is completed. The Trust, to the extent it has not already done so, remains obligated to deliver the stocks to NSCC, and the market risk of any increase in the value of the stocks until delivery is made by the Trust to NSCC could adversely affect the NAV of the Trust. Investors should note that the stocks to be delivered to a redeemer submitting a redemption request outside of the SPDR Clearing Process that are not delivered to such redeemer are not covered by NSCC's guarantee of completion of delivery.

SPDR TRUST SERIES 1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Trustee and Unitholders of SPDR Trust Series 1

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of SPDR Trust Series 1 (the "Trust") at September 30, 2004, and the results of its operations, the changes in its net assets and the financial highlights for the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Trustee; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by the Trustee, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at September 30, 2004 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Boston, Massachusetts
November 19, 2004

SPDR Trust Series 1
Statement of Assets and Liabilities
September 30, 2004


Assets
Investments in securities, at value	$	45,686,953,816
Cash		196,463,008
Receivable for investments sold		46,237,540
Dividends receivable		52,160,817
Total Assets		45,981,815,181
Liabilities
Payable for investments purchased		49,950,786
Income distribution payable		198,518,872
Accrued Trustee fees		1,075,680
Accrued expenses and other liabilities		16,344,885
Total Liabilities		265,890,223
Net Assets	$	45,715,924,958
Net Assets Represented by:
Paid in surplus	$	58,622,710,103
Distribution in excess of net investment income		(96,877,537	)
Accumulated net realized loss on investments		(3,331,825,734	)
Net unrealized depreciation on investments		(9,478,081,874	)
Net Assets	$	45,715,924,958
Net asset value per SPDR	$	111.78
Units of fractional undivided interest ("SPDRs") outstanding, unlimited units authorized, $0.00 par value		408,979,824
Cost of investments	$	55,165,035,690

See accompanying notes to financial statements.

SPDR Trust Series 1
Statements of Operations
September 30, 2004


	For the Year Ended September 30, 2004			For the Year Ended September 30, 2003			For the Year Ended September 30, 2002
Investment Income
Dividend income(a)	$	727,345,627		$	693,488,016		$	430,308,111
Expenses
Trustee fees		25,819,307			23,869,863			17,755,841
Marketing expense		12,584,583			11,609,929			7,944,415
S&P license fee		14,682,013			13,544,917			9,967,905
SEC registration fee		191,800			1,000,100			—
Legal and audit services		126,596			126,250			134,206
Other expenses		381,914			380,870			380,957
Total expenses		53,786,213			50,531,929			36,183,324
Rebate from Trustee		(7,350,434	)		(4,092,213	)		(2,007,651	)
Net expenses		46,435,779			46,439,716			34,175,673
Trustee earnings credit		(1,233,786	)		(521,780	)		(1,523,393	)
Net expenses after Trustee earnings credits		45,201,993			45,917,936			32,652,280
Net Investment Income		682,143,634			647,570,080			397,655,831
Realized and Unrealized Gain/(Loss) on Investments
Net realized gain/(loss) on investment transactions		2,220,162,834			2,065,341,241			(1,023,252,620	)
Net change in unrealized depreciation		2,153,046,919			5,437,715,771			(6,497,205,220	)
Net Realized and Unrealized Gain/(Loss) on Investments		4,373,209,753			7,503,057,012			(7,520,457,840	)
Net increase (decrease) in net assets resulting from operations	$	5,055,353,387		$	8,150,627,092		$	(7,122,802,009	)

(a)	Net of withholding tax expense of $0, $0, and $1,255,246 for 2004, 2003, and 2002, respectively.

See accompanying notes to financial statements.

SPDR Trust Series 1
Statements of Changes in Net Assets


	For the Year Ended September 30, 2004			For the Year Ended September 30, 2003			For the Year Ended September 30, 2002
Increase (decrease) in net assets resulting from operations:
Net investment income	$	682,143,634		$	647,570,080		$	397,655,831
Net realized gain/(loss) on investment transactions		2,220,162,834			2,065,341,241			(1,023,252,620	)
Net change in unrealized depreciation		2,153,046,919			5,437,715,771			(6,497,205,220	)
Net increase (decrease) in net assets resulting from operations		5,055,353,387			8,150,627,092			(7,122,802,009	)
Undistributed net investment income included in price of units issued and redeemed, net		67,955,540			(6,804,410	)		34,187,594
Distributions to unitholders from net investment income		(741,887,578	)		(640,459,798	)		(425,983,780	)
Net increase (decrease) in net assets from issuance and redemption of SPDRs		5,279,936,052			(2,147,671,890	)		13,337,612,220
Net increase in net assets during period		9,661,357,401			5,355,690,994			5,823,014,025
Net assets at beginning of period		36,054,567,557			30,698,876,563			24,875,862,538
Net assets end of period*	$	45,715,924,958		$	36,054,567,557		$	30,698,876,563
* Includes distributions in excess of net investment income	$	96,877,537		$	(29,877,598	)	$	(36,266,188	)

See accompanying notes to financial statements.

SPDR Trust Series 1
Financial Highlights
Selected data for a SPDR outstanding during the period


	For the Year Ended 9/30/04			For the Year Ended 9/30/03			For the Year Ended 9/30/02			For the Year Ended 9/30/01			For the Year Ended 9/30/00
Net asset value, beginning of period	$	99.87		$	81.78		$	104.33		$	143.83		$	128.39
Investment Operations:
Net investment income		1.81			1.55			1.46			1.45			1.45
Net realized and unrealized gain (loss) on investments		11.89			18.09			(22.55	)		(39.51	)		15.43
Total from investment operations		13.70			19.64			(21.09	)		(38.06	)		16.88
Less distributions from:
Net investment income		(1.79	)		(1.55	)		(1.46	)		(1.44	)		(1.44	)
Net asset value, end of period	$	111.78		$	99.87		$	81.78		$	104.33		$	143.83
Total investment return		13.62	%		24.13	%		−20.46	%		−26.60	%		13.16	%
Ratios and supplemental data
Ratio to average net assets:
Net investment income		1.63	%		1.67	%		1.40	%		1.14	%		1.01	%
Total expenses(2)		0.11	%		0.12	%		0.11	%		0.11	%		0.13	%
Portfolio turnover rate(1)		2.23	%		1.76	%		4.43	%		4.61	%		8.20	%
Total expenses excluding Trustee earnings credit		0.11	%		0.12	%		0.12	%		0.12	%		0.14	%
Total expenses excluding Trustee earnings credit and fee waivers		0.13	%		0.13	%		0.13	%		0.13	%		0.17	%
Net assets, end of period (000's)	$	45,715,925		$	36,054,568		$	30,698,877		$	24,875,863		$	24,288,629

(1)	Portfolio turnover ratio excludes securities received or delivered from processing creations or redemptions of SPDRs.

(2)	Net of expenses reimbursed by the Trustee.

SPDR Trust Series 1
Notes to Financial Statements
September 30, 2004

NOTE 1—ORGANIZATION

SPDR Trust Series 1 (the "Trust") is a unit investment trust created under the laws of the State of New York and registered under the Investment Company Act of 1940. The Trust was created to provide investors with the opportunity to purchase a security representing a proportionate undivided interest in a portfolio of securities consisting of substantially all of the common stocks, in substantially the same weighting, which comprise the Standard & Poor's 500 Composite Price Index (the "S&P Index"). Each unit of fractional undivided interest in the Trust is referred to as a Standard & Poor's Depositary Receipt ("SPDR"). The Trust commenced operations on January 22, 1993 upon the initial issuance of 150,000 SPDRs (equivalent to three "Creation Units"—see Note 4) in exchange for a portfolio of securities assembled to reflect the intended portfolio composition of the Trust.

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from these estimates. The following is a summary of significant accounting policies followed by the Trust.

Security Valuation

Portfolio securities are valued based on the closing sale price on the exchange which is deemed to be the principal market for the security, except for securities listed on the NASDAQ which are valued at the NASDAQ official close price. If no closing sale price is available, then the security is valued at the previous closing sale price on the exchange which is deemed to be the principal market for the security, or at the previous official close price if the security is listed on the NASDAQ. If there is no closing sale price available, valuation will be determined by the Trustee in good faith based on available information.

Investment Transactions

Investment transactions are recorded on the trade date. Realized gains and losses from the sale or disposition of securities are recorded on the identified cost basis. Dividend income is recorded on the ex-dividend date.

SPDR Trust Series 1
Notes to Financial Statements
September 30, 2004

Distributions to Unitholders

The Trust declares and distributes dividends from net investment income to its unitholders quarterly. The Trust will distribute net realized capital gains, if any, at least annually.

Federal Income Tax

The Trust has qualified and intends to qualify as a "regulated investment company" under Subchapter M of the Internal Revenue Code of 1986, as amended. By so qualifying and electing, the Trust will not be subject to federal income taxes to the extent it distributes its taxable income, including any net realized capital gains, for each fiscal year. In addition, by distributing during each calendar year substantially all of its net investment income and capital gains, if any, the Trust will not be subject to federal excise tax. Income and capital gain distributions are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. These differences are primarily due to differing treatments for income equalization, in-kind transactions and losses deferred due to wash sales. Net investment income per share calculations in the financial highlights for all years presented exclude these differences.

During 2004, the Trust reclassified $2,590,784,293 of non-taxable security gains realized in the in-kind redemption of Creation Units (Note 4) as an increase to paid in surplus in the Statement of Assets and Liabilities. At September 30, 2004, the Trust had capital loss carryforwards of $33,523, $27,700,040, $56,816,996, $403,831,303, $472,492,447, $1,530,834,020, and $445,024,832 which will expire on September 30, 2005, September 30, 2007, September 30, 2008, September 30, 2009, September 30, 2010, September 30, 2011, and September 30, 2012, respectively. The Trust incurred losses of $335,123,098 during the period November 1, 2003 through September 30, 2004 that were deferred for tax purposes until fiscal 2005.

The Tax character of distributions paid during the year ended September 30, 2004 was $741,887,578 of ordinary income. The Tax character of distributions paid during the year ended September 30, 2003 was $640,459,798 of ordinary income.

As of September 30, 2004, the components of distributable earnings (excluding unrealized appreciation (depreciation)) on the tax basis were undistributed ordinary income of $100,594,786 and undistributed long term capital gain of $0.

SPDR Trust Series 1
Notes to Financial Statements
September 30, 2004

NOTE 3—TRANSACTIONS WITH THE TRUSTEE AND SPONSOR

In accordance with the Trust Agreement, State Street Bank and Trust Company (the "Trustee") maintains the Trust's accounting records, acts as custodian and transfer agent to the Trust, and provides administrative services, including filing of all required regulatory reports. The Trustee is also responsible for determining the composition of the portfolio of securities which must be delivered and/or received in exchange for the issuance and/or redemption of Creation Units of the Trust, and for adjusting the composition of the Trust's portfolio from time to time to conform to changes in the composition and/or weighting structure of the S&P 500 Index. For these services, the Trustee received a fee at the following annual rates for the year ended September 30, 2004:

The Adjustment Amount is the sum of (a) the excess or deficiency of transaction fees received by the Trustee, less the expenses incurred in processing orders for creation and redemption of SPDRs and (b) the amounts earned by the Trustee with respect to the cash held by the Trustee for the benefit of the Trust. During the year ended September 30, 2004, the Adjustment Amount reduced the Trustee's fee by $1,183,644. The Adjustment Amount included a deficiency of net transaction fees from processing orders of $(50,142) and a Trustee earnings credit of $1,233,786.

From the period October 1, 2003 through April 18, 2004, the Trustee agreed to reimburse the Trust for, or assume, the ordinary operating expenses of the Trust, before the Trustee earnings credit, which exceeded 12.00/100 of 1% per annum of the daily net asset value of the Trust. Effective April 19, 2004, the Trustee had voluntarily agreed to waive an additional portion of its fee, as needed, for one year, so that the total operating expenses would not exceed 0.10% of the Trust's daily net asset value. The total amount of such reimbursement by the Trustee for the year ended September 30, 2004 was $7,350,434. The Trustee has not entered into an agreement with the Trust to recapture waived fees in subsequent periods.

SPDR Trust Series 1
Notes to Financial Statements
September 30, 2004

The Trust has entered into a Memorandum of Agreement with Standard and Poor's ("S&P"), the American Stock Exchange LLC (the "AMEX"), and PDR Services (the "Sponsor") pursuant to which the Trust has obtained a sub-license to use certain S&P marks. The Memorandum of Agreement requires the Trust to pay annually a sub-license fee to the S&P equal to the greater of: (i) 0.03% of the Trust's daily average net assets of the Trust plus a volume based fee ranging from $0.03 to $0.04 per round lot trade of the average daily trading volume, or (ii) $125,000, the minimum annual fee.

NOTE 4—TRUST TRANSACTIONS IN SPDRS

Transactions in SPDRs were as follows:


	Year ended September 30, 2004						Year ended September 30, 2003						Year ended September 30, 2002
	SPDRs			Amount			SPDRs			Amount			SPDRs			Amount
SPDRs sold		262,700,000		$	29,115,803,571			337,100,000		$	30,662,851,816			239,200,000		$	23,977,046,407
Dividend reinvestment SPDRs issued		27,657			3,069,876			14,556			1,332,378			8,716			891,781
SPDRs redeemed		(214,750,000	)		(23,770,981,855	)		(351,500,000	)		(32,818,660,494	)		(102,250,000	)		(10,606,138,374	)
Net income equalization		—			(67,955,540	)		—			6,804,410			—			(34,187,594	)
Net increase (decrease)		47,977,657		$	5,279,936,052			(14,385,444	)	$	(2,147,671,890	)		136,958,716		$	13,337,612,220

Except for under the Trust's dividend reinvestment plan, SPDRs are issued and redeemed by the Trust only in Creation Unit size aggregations of 50,000 SPDRs. Such transactions are only permitted on an in-kind basis, with a separate cash payment which is equivalent to the undistributed net investment income per SPDR (income equalization) and a balancing cash component to equate the transaction to the net asset value per unit of the Trust on the transaction date. A transaction fee of $3,000 is charged in connection with each creation or redemption of Creation Units through the SPDR Clearing Process per Participating party per day, regardless of the number of Creation Units created or redeemed. Transaction fees are received by the Trustee and used to offset the expense of processing orders.

NOTE 5—INVESTMENT TRANSACTIONS

For the year ended September 30, 2004, the Trust had in-kind contributions, in-kind redemptions, purchases and sales of investment securities of $29,017,541,212, $23,741,736,917, $987,083,334, and $981,054,440, respectively.

SPDR Trust Series 1
Notes to Financial Statements
September 30, 2004

At September 30, 2004, the cost of investments for federal income tax purposes was $55,223,958,617, accordingly, gross unrealized appreciation was $1,822,153,515 and gross unrealized depreciation was $11,359,158,316, resulting in net unrealized depreciation of $9,537,004,801.

SPDR Trust Series 1
Schedule of Investments
September 30, 2004


Common Stocks	Shares		Value
3M Co.		3,434,968	$	274,694,391
Abbott Laboratories		6,849,604		290,149,225
ACE Ltd.		1,208,123		48,397,407
ADC Telecommunications, Inc.*		3,559,143		6,442,049
Adobe Systems, Inc.		1,026,672		50,789,464
Advanced Micro Devices, Inc.*		1,474,618		19,170,034
AES Corp.*		2,722,661		27,199,383
Aetna, Inc.		677,493		67,701,875
Affiliated Computer Services, Inc. Cl A*		562,253		31,300,625
Aflac, Inc.		2,233,263		87,566,242
Agilent Technologies, Inc. *		2,098,896		45,273,187
Air Products & Chemicals, Inc.		1,011,171		54,987,479
Alberto-Culver Co. (Class B)		381,773		16,599,490
Albertson's, Inc.		1,616,865		38,691,579
Alcoa, Inc.		3,836,166		128,856,816
Allegheny Energy, Inc.*		558,903		8,920,092
Allegheny Technologies, Inc.		378,473		6,907,132
Allergan, Inc.		572,296		41,520,075
Allied Waste Industries, Inc.*		1,413,539		12,509,820
Allstate Corp.		3,044,583		146,109,538
ALLTEL Corp.		1,353,069		74,297,019
Altera Corp.*		1,673,051		32,741,608
Altria Group, Inc.		8,995,850		423,164,784
Ambac Financial Group, Inc.		478,683		38,270,706
Amerada Hess Corp.		388,739		34,597,771
Ameren Corp.		853,849		39,405,131
American Electric Power Co., Inc.		1,753,469		56,040,869
American Express Co.		5,569,945		286,629,370
American International Group, Inc.		11,441,092		777,879,845
American Power Conversion Corp.		890,121		15,479,204
American Standard Companies Inc.*		962,581		37,454,027
AmerisourceBergen Corp.		494,570		26,563,355
Amgen Inc.*		5,578,289		316,177,421
AmSouth Bancorp		1,550,040		37,820,976
Anadarko Petroleum Corp.		1,109,116		73,600,938
Analog Devices, Inc.		1,647,913		63,906,066
Andrew Corp.*		701,673		8,588,478
Anheuser-Busch Companies Inc.		3,531,874		176,417,106
Anthem, Inc.*		613,228		53,504,143
Aon Corp.		1,393,367		40,045,368
Apache Corp.		1,419,442		71,128,239
Apartment Investment & Management Co. (Class A)		417,648		14,525,797
Apollo Group, Inc. (Class A)*		850,887		62,429,579
Apple Computer, Inc.*		1,705,289	$	66,079,949
Applera Corp. — Applied Biosystems Group		911,456		17,199,175
Applied Materials, Inc.*		7,425,498		122,446,462
Applied Micro Circuits Corp.*		1,350,961		4,228,508
Archer-Daniels-Midland Co.		2,861,478		48,587,896
Ashland, Inc.		320,040		17,947,843
AT&T Corp.		3,503,975		50,176,922
AT&T Wireless Services, Inc.*		12,012,149		177,539,562
Autodesk, Inc.		479,007		23,294,110
Automatic Data Processing, Inc.		2,566,378		106,042,739
AutoNation, Inc.*		1,173,727		20,047,257
Autozone, Inc.*		365,236		28,214,481
Avaya, Inc.*		1,874,463		26,130,014
Avery Dennison Corp.		488,729		32,148,594
Avon Products, Inc.		2,079,508		90,832,909
Baker Hughes, Inc.		1,463,136		63,968,306
Ball Corp.		493,660		18,477,694
Bank of America Corp.		17,870,528		774,329,978
Bank of New York Co., Inc. (The)		3,417,436		99,686,608
Bausch & Lomb, Inc.		238,892		15,874,373
Baxter International Inc.		2,653,454		85,335,081
BB&T Corp.		2,470,312		98,046,683
Bear Stearns Inc.		439,651		42,281,237
Becton, Dickinson and Company		1,115,868		57,690,376
Bed Bath & Beyond, Inc.*		1,308,661		48,564,410
BellSouth Corp.		8,063,178		218,673,387
Bemis Co., Inc.		487,160		12,948,713
Best Buy Co., Inc.		1,417,389		76,879,179
Big Lots, Inc.*		509,380		6,229,717
Biogen Idec Inc, Com*		1,495,512		91,480,469
Biomet, Inc.		1,129,591		52,955,226
BJ Services Co.*		690,400		36,183,864
Black & Decker Corp.		344,828		26,703,480
Block (H&R), Inc.		724,419		35,800,787
BMC Software, Inc.*		991,771		15,679,900
Boeing Co.		3,698,394		190,911,098
Boise Cascade Corp.		385,247		12,821,020
Boston Scientific Corp.*		3,700,955		147,038,942
Bristol-Myers Squibb Co.		8,554,286		202,479,950
Broadcom Corp. (Class A)*		1,333,970		36,404,041
Brown-Forman Corp. (Class B)		535,515		24,526,587
Brunswick Corp.		403,222		18,451,439
Burlington Northern Santa Fe Corp.		1,639,800		62,820,738
Burlington Resources, Inc.		1,747,152		71,283,802
C.R. Bard, Inc.		468,514		26,531,948
Calpine Corp.*		1,665,643		4,830,365
Campbell Soup Co.		1,818,603		47,811,073

(*) Non-income producing security

The accompanying notes are an integral part of these financial statements.

SPDR Trust Series 1
Schedule of Investments (continued)
September 30, 2004


Common Stocks	Shares		Value
Capital One Financial Corp.		1,055,349	$	77,990,291
Cardinal Health, Inc.		1,890,373		82,741,626
Caremark Rx, Inc.*		2,048,417		65,692,733
Carnival Corp.		2,768,263		130,911,157
Caterpillar, Inc.		1,501,185		120,770,333
Cendant Corp.		4,642,464		100,277,222
CenterPoint Energy, Inc.		1,354,485		14,032,465
Centex Corp.		533,458		26,918,291
CenturyTel, Inc.		593,174		20,310,278
Charles Schwab Corp. (The)		6,021,766		55,340,030
ChevronTexaco Corp.		9,358,496		501,989,725
Chiron Corp.*		836,733		36,983,599
Chubb Corp.		822,014		57,771,144
CIENA Corp.*		2,012,517		3,984,784
CIGNA Corp.		604,178		42,068,914
Cincinnati Financial Corp.		752,926		31,035,610
CINergy Corp.		781,341		30,941,104
Cintas Corp.		759,241		31,918,492
Circuit City Stores, Inc.		937,774		14,385,453
Cisco Systems, Inc. *		29,695,595		537,490,269
Citigroup, Inc.		22,761,117		1,004,220,482
Citizens Communications Co.		1,457,154		19,511,292
Citrix Systems, Inc.*		722,580		12,659,602
Clear Channel Communications, Inc.		2,589,648		80,719,328
Clorox Co.		933,676		49,764,931
CMS Energy Corp.*		593,922		5,654,137
Coach, Inc. Com*		843,268		35,771,429
Coca-Cola Co. (The)		10,659,576		426,916,019
Coca-Cola Enterprises, Inc.		2,026,073		38,292,780
Colgate-Palmolive Co.		2,344,449		105,922,206
Comcast Corp. (Class A)*		9,848,977		278,135,110
Comerica, Inc.		760,936		45,161,552
Computer Associates International, Inc.		2,555,684		67,214,489
Computer Sciences Corp.*		832,067		39,190,356
Compuware Corp.*		1,676,583		8,634,402
Comverse Technology, Inc.*		788,022		14,838,454
ConAgra Foods, Inc.		2,320,379		59,656,944
Conoco Phillips, Inc.		3,001,679		248,689,105
Consolidated Edison, Inc.		1,060,963		44,602,885
Constellation Energy Group, Inc.		771,816		30,749,149
Convergys Corp.*		665,873		8,942,674
Cooper Industries Ltd (Class A)		406,675		23,993,825
Cooper Tire & Rubber Co.		330,054		6,657,189
Coors (Adolph) Co. (Class B)		168,533		11,446,761
Corning Inc.*		6,125,484		67,870,363
Costco Wholesale Corp.		2,000,874		83,156,323
Countrywide Financial Corp.		2,449,161		96,472,452
Crane Co.		276,792		8,004,825
CSX Corp.		942,618		31,294,918
Cummins, Inc.		190,010		14,039,839
CVS Corp.		1,721,107	$	72,510,238
Dana Corp.		675,433		11,948,410
Danaher Corp.		1,355,892		69,530,142
Darden Restaurants, Inc.		728,261		16,983,047
Deere & Co.		1,074,991		69,390,669
Dell Inc.*		10,966,168		390,395,581
Delphi Corp.		2,517,447		23,387,083
Delta Air Lines, Inc.*		561,603		1,847,674
Deluxe Corp.		223,168		9,154,351
Devon Energy Corp.		1,062,223		75,428,455
Dillard's, Inc. (Class A)		339,454		6,700,822
Disney (Walt) Co. (The)		9,023,191		203,472,957
Dollar General Corp.		1,444,227		29,101,174
Dominion Resources, Inc.		1,434,077		93,573,524
Dover Corp.		886,938		34,475,280
Dow Chemical Co.		4,114,829		185,907,974
Dow Jones & Co., Inc.		368,480		14,963,973
DTE Energy Co.		744,657		31,417,079
Du Pont (E.I.) de Nemours		4,408,353		188,677,508
Duke Energy Corp.		4,122,796		94,370,800
Dynegy, Inc. (Class A)*		1,585,779		7,913,037
ETRADE Financial Corp.		1,619,967		18,500,023
Eastman Chemical Co.		351,412		16,709,641
Eastman Kodak Co.		1,263,337		40,704,718
Eaton Corp.		661,872		41,969,304
eBay, Inc.*		2,893,882		266,063,511
Ecolab, Inc.		1,128,304		35,473,878
Edison International		1,453,455		38,531,092
El Paso Corp.		2,830,835		26,015,374
Electronic Arts Inc.*		1,295,182		59,565,420
Electronic Data Systems Corp.		2,133,598		41,370,465
EMC Corp.*		10,654,670		122,954,892
Emerson Electric Co.		1,850,442		114,523,855
Engelhard Corp.		553,662		15,696,318
Entergy Corp.		989,248		59,958,321
EOG Resources, Inc.		515,775		33,963,784
Equifax, Inc.		613,910		16,182,668
Equity Office Properties Trust		1,787,266		48,702,998
Equity Residential Properties Trust		1,199,859		37,195,629
Exelon Corp.		2,867,163		105,196,210
Express Scripts, Inc. (Class A)*		351,836		22,988,964
Exxon Mobil Corp.		28,578,739		1,381,210,456
Family Dollar Stores, Inc.		772,375		20,931,362
Fannie Mae		4,256,509		269,862,671
Federated Department Stores, Inc.		799,038		36,300,296
Federated Investors, Inc. (Class B)		480,545		13,666,700
FedEx Corp.		1,317,925		112,932,993
Fifth Third Bancorp		2,486,557		122,388,336

(*) Non-income producing security

The accompanying notes are an integral part of these financial statements.

SPDR Trust Series 1
Schedule of Investments (continued)
September 30, 2004


Common Stocks	Shares		Value
First Data Corp.		3,765,611	$	163,804,078
First Horizon National Corp.		544,087		23,591,612
FirstEnergy Corp.		1,443,486		59,298,405
Fiserv, Inc.*		824,599		28,745,521
Fisher Scientific International, Inc.*		501,318		29,241,879
Fluor Corp.		346,532		15,427,605
Ford Motor Co.		8,047,319		113,064,832
Forest Laboratories, Inc.*		1,623,540		73,026,829
Fortune Brands, Inc.		632,754		46,880,744
FPL Group, Inc.		813,833		55,601,071
Franklin Resources, Inc.		1,100,820		61,381,723
Freddie Mac		3,022,629		197,196,316
Freeport-McMoran Copper & Gold, Inc. (Class B)		759,422		30,756,591
Gannett Co., Inc.		1,169,163		97,929,093
Gap, Inc. (The)		3,957,368		74,002,782
Gateway, Inc.*		1,490,042		7,375,708
General Dynamics Corp.		876,290		89,469,209
General Electric Co.		46,389,245		1,557,750,847
General Mills, Inc.		1,627,210		73,061,729
General Motors Corp.		2,488,557		105,713,901
Genuine Parts Co.		778,916		29,894,796
Genzyme Corp. *		989,550		53,841,415
Georgia-Pacific Corp.		1,113,091		40,015,621
Gilead Sciences, Inc. Com*		1,876,175		70,131,421
Gillette Co.		4,407,012		183,948,681
Golden West Financial Corp.		670,119		74,349,703
Goldman Sachs Group, Inc.		2,119,438		197,616,399
Goodrich (B.F.) Co. (The)		518,860		16,271,450
Goodyear Tire & Rubber Co. (The)*		720,370		7,736,774
Great Lakes Chemical Corp.		231,904		5,936,742
Guidant Corp.		1,360,802		89,867,364
Halliburton Co.		1,944,538		65,511,485
Harley-Davidson, Inc.		1,295,795		77,022,055
Harrah's Entertainment, Inc.		504,297		26,717,655
Hartford Financial Services Group, Inc. (The)		1,286,871		79,695,921
Hasbro, Inc.		787,622		14,807,294
HCA, Inc.		2,132,584		81,358,080
Health Management Associates, Inc.		1,093,128		22,332,605
Heinz (H.J.) Co.		1,559,732		56,181,547
Hercules, Inc.*		492,855		7,023,184
Hershey Foods Corp.		1,080,424		50,466,605
Hewlett-Packard Co.		13,267,552		248,766,600
Hilton Hotels Corp.		1,660,640		31,286,458
Home Depot, Inc.		9,642,815		377,998,348
Honeywell International, Inc.		3,792,252		135,990,157
Hospira, Inc.*		689,561		21,100,567
Humana, Inc.*		755,831		15,101,503
Huntington Bancshares, Inc.		1,016,018		25,309,008
Illinois Tool Works, Inc.		1,327,199		123,655,131
IMS Health, Inc.		1,031,718		24,678,695
Ingersoll-Rand Co. (Class A)		760,914	$	51,719,325
Intel Corp.		28,178,769		565,266,106
International Business Machines Corp.		7,358,912		630,953,115
International Flavors & Fragrances, Inc.		421,089		16,085,600
International Game Technology		1,510,745		54,311,283
International Paper Co.		2,121,269		85,720,480
Interpublic Group of Companies Inc.*		1,831,519		19,395,786
Intuit, Inc.*		841,374		38,198,380
ITT Industries, Inc.		405,729		32,454,263
J.C. Penney Co., Inc. (Holding Co.)		1,266,964		44,698,490
J.P. Morgan Chase & Co.		15,649,730		621,763,773
Jabil Circuit, Inc.*		874,217		20,106,991
Janus Capital Group, Inc.		1,062,769		14,464,286
JDS Uniphase Corp.*		6,332,078		21,339,103
Jefferson-Pilot Corp.		622,257		30,901,283
Johnson & Johnson Co.		13,037,603		734,408,177
Johnson Controls, Inc.		833,102		47,328,525
Jones Apparel Group, Inc.		553,949		19,831,374
KB HOME		213,033		17,999,158
Kellogg Co.		1,813,110		77,347,273
Kerr-McGee Corp.		658,274		37,686,186
Keycorp		1,802,331		56,953,660
KeySpan Corp.		696,379		27,298,057
Kimberly-Clark Corp.		2,172,568		140,326,167
Kinder Morgan, Inc.		543,860		34,165,285
King Pharmaceuticals, Inc.*		1,078,051		12,871,929
Kla-Tencor Corp.*		840,906		34,880,781
Knight Ridder, Inc.		352,115		23,045,927
Kohl's Corp.*		1,492,870		71,941,405
Kroger Co.*		3,296,705		51,164,862
Leggett & Platt, Inc.		875,854		24,611,497
Lehman Brothers Holdings, Inc.		1,209,548		96,425,167
Lexmark International, Inc. (Class A)*		564,098		47,389,873
Lilly (Eli) & Co.		4,946,207		297,019,730
Limited, Inc. (The)		2,055,479		45,816,627
Lincoln National Corp.		786,280		36,955,160
Linear Technology Corp.		1,358,646		49,237,331
Liz Claiborne, Inc.		483,685		18,244,598
Lockheed Martin Corp.		1,968,999		109,830,764
Loews Corp.		818,570		47,886,345
Louisiana-Pacific Corp.		484,554		12,574,176
Lowe's Companies Inc.		3,449,450		187,477,607
LSI Logic Corp.*		1,637,727		7,058,603
Lucent Technologies, Inc.*		18,598,353		58,956,779
M&T Bank Corp.		520,242		49,787,159
Manor Care, Inc.		398,755		11,946,700
Marathon Oil Corp.		1,499,469		61,898,080

(*) Non-income producing security

The accompanying notes are an integral part of these financial statements.

SPDR Trust Series 1
Schedule of Investments (continued)
September 30, 2004


Common Stocks	Shares		Value
Marriott International, Inc.		993,199	$	51,606,620
Marsh & McLennan Companies Inc.		2,298,534		105,180,916
Marshall & Ilsley Corp.		975,479		39,311,804
Masco Corp.		1,924,085		66,438,655
Mattel, Inc.		1,855,649		33,642,916
Maxim Integrated Products, Inc.		1,415,293		59,852,741
May Department Stores Co.		1,274,978		32,677,686
Maytag Corp.		347,155		6,377,237
MBIA, Inc.		635,063		36,967,017
MBNA Corp.		5,604,371		141,230,149
McCormick & Co., Inc.		622,774		21,386,059
McDonald's Corp.		5,554,436		155,690,841
McGraw-Hill Cos., Inc. (The)		843,366		67,207,837
McKesson Corp.		1,267,075		32,500,474
MeadWestvaco Corp.		883,540		28,184,926
Medco Health Solutions, Inc.*		1,202,350		37,152,615
MedImmune, Inc.*		1,106,782		26,230,733
Medtronic, Inc.		5,322,165		276,220,363
Mellon Financial Corp.		1,863,957		51,612,969
Merck & Co., Inc.		9,759,499		322,063,467
Mercury Interactive Corp.*		370,919		12,937,655
Meredith Corp.		228,514		11,741,049
Merrill Lynch & Co., Inc.		4,125,226		205,106,237
MetLife, Inc.		3,319,514		128,299,216
MGIC Investment Corp.		434,868		28,940,465
Micron Technology, Inc.*		2,671,462		32,137,688
Microsoft Corp.		47,779,326		1,321,098,364
Millipore Corp. *		214,059		10,242,723
Molex, Inc.		839,615		25,037,319
Monsanto Co.		1,141,202		41,562,577
Monster Worldwide, Inc.*		475,165		11,708,066
Moody's Corp.		658,151		48,209,561
Morgan Stanley Dean Witter & Co.		4,821,891		237,719,226
Motorola, Inc.		10,291,658		185,661,510
Mylan Laboratories, Inc.		1,173,505		21,123,090
Nabors Industries Ltd.*		633,826		30,011,661
National City Corp.		2,911,665		112,448,502
National Semiconductor Corp.*		1,541,653		23,880,205
Navistar International Corp.*		304,080		11,308,735
NCR Corp.*		416,987		20,678,385
Network Appliance, Inc.*		1,520,790		34,978,170
New York Times Co. (The) (Class A)		655,079		25,613,589
Newell Rubbermaid, Inc.		1,164,873		23,344,055
Newmont Mining Corp. (Holding Co.)		1,913,601		87,126,254
Nextel Communications, Inc. (Class A)*		4,864,714		115,974,782
Nicor, Inc.		201,677		7,401,546
Nike, Inc. (Class B)		1,162,444	$	91,600,587
NiSource, Inc.		1,156,870		24,305,839
Noble Corp.*		590,956		26,563,472
Nordstrom, Inc.		598,371		22,881,707
Norfolk Southern Corp.		1,726,061		51,333,054
North Fork Bancorporation, Inc.		1,372,249		60,996,468
Northern Trust Corp.		973,359		39,713,047
Northrop Grumman Corp.		1,583,411		84,443,309
Novell, Inc.*		1,567,208		9,889,082
Novellus Systems, Inc.*		676,793		17,995,926
Nucor Corp.		330,022		30,154,110
NVIDIA Corp.*		706,822		10,263,055
Occidental Petroleum Corp.		1,713,922		95,859,657
Office Depot, Inc.*		1,313,614		19,743,618
Omnicom Group, Inc.		826,533		60,386,501
Oracle Corp.*		22,816,356		257,368,496
PACCAR, Inc.		778,479		53,808,468
Pactiv Corp.*		672,774		15,641,996
Pall Corp.		562,438		13,768,482
Parametric Technology Corp.*		1,208,646		6,381,651
Parker-Hannifin Corp.		525,221		30,914,508
Paychex, Inc.		1,666,219		50,236,503
Peoples Energy Corp.		157,075		6,546,886
PeopleSoft, Inc.*		1,607,174		31,902,404
PepsiCo, Inc.		7,442,496		362,077,430
PerkinElmer, Inc.		553,284		9,527,550
Pfizer Inc.		33,165,974		1,014,878,804
PG&E Corp.*		1,761,383		53,546,043
Phelps Dodge Corp.		409,697		37,704,415
Pinnacle West Capital Corp.		380,115		15,774,773
Pitney Bowes, Inc.		1,032,020		45,512,082
Plum Creek Timber Co., Inc.		823,984		28,864,160
PMC-Sierra, Inc.*		738,194		6,503,489
PNC Financial Services Group		1,226,118		66,332,984
Power-One, Inc.*		345,259		2,237,278
PPG Industries, Inc.		750,524		45,992,111
PPL Corp.		785,220		37,046,680
Praxair, Inc.		1,431,683		61,190,131
Principal Financial Group		1,376,967		49,529,503
Procter & Gamble Co.		11,166,076		604,308,033
Progress Energy, Inc.		1,082,325		45,825,640
Progressive Corp. (The)		958,372		81,222,027
ProLogis		795,534		28,034,618
Providian Financial Corp.*		1,281,179		19,909,522
Prudential Financial, Inc.		2,280,178		107,259,573
Public Service Enterprise Group, Inc.		1,042,821		44,424,175
Pulte Homes, Inc.		543,694		33,366,501
QLogic Corp.*		407,877		12,077,238
QUALCOMM, Inc.		7,111,114		277,617,891
Quest Diagnostics Inc.		456,552		40,277,017

(*) Non-income producing security

The accompanying notes are an integral part of these financial statements.

SPDR Trust Series 1
Schedule of Investments (continued)
September 30, 2004


Common Stocks	Shares		Value
Qwest Communications International, Inc.*		7,785,595	$	25,926,031
R.R. Donnelley & Sons Co.		945,010		29,597,713
RadioShack Corp.		722,842		20,702,195
Raytheon Co.		1,982,351		75,289,691
Reebok International Ltd.		252,763		9,281,457
Regions Financial Corp.		2,044,154		67,579,731
Reynolds American, Inc.		658,298		44,790,596
Robert Half International, Inc.*		754,273		19,437,615
Rockwell Automation, Inc.		828,674		32,069,684
Rockwell Collins, Inc.		788,568		29,287,416
Rohm & Haas Co.		983,704		42,269,761
Rowan Companies, Inc.*		436,330		11,519,112
Ryder System, Inc.		279,229		13,134,932
Sabre Holdings Corp.		614,915		15,083,865
SAFECO Corp.		553,127		25,250,248
Safeway, Inc.*		1,957,848		37,806,045
Sanmina-SCI Corp.*		2,345,400		16,535,070
Sara Lee Corp.		3,485,518		79,678,941
SBC Communications Inc.		14,545,193		377,447,758
Schering-Plough Corp.		6,490,775		123,714,171
Schlumberger Ltd.		2,584,352		173,952,733
Scientific-Atlanta, Inc.		662,261		17,165,805
Sealed Air Corp.*		386,008		17,891,471
Sears, Roebuck & Co.		934,566		37,242,455
Sempra Energy		1,001,409		36,240,992
Sherwin-Williams Co. (The)		629,082		27,654,445
Siebel Systems, Inc.*		2,070,585		15,612,211
Sigma-Aldrich Corp.		306,130		17,755,540
Simon Property Group, Inc.		900,322		48,284,269
SLM Corp.		1,927,519		85,967,347
Snap-on, Inc.		259,857		7,161,659
Solectron Corp.*		3,999,754		19,798,782
Southern Co. (The)		3,208,142		96,180,097
SouthTrust Corp.		1,468,199		61,165,170
Southwest Airlines Co.		3,425,782		46,659,151
Sovereign Bancorp, Inc.		1,430,280		31,208,710
Sprint Corp.		6,385,138		128,532,828
St. Jude Medical, Inc. *		757,709		57,032,756
St. Paul Companies Inc. (The)		2,926,190		96,739,841
Stanley Works (The)		358,204		15,234,416
Staples, Inc.		2,164,827		64,555,141
Starbucks Corp.*		1,746,583		79,399,663
Starwood Hotels & Resorts Worldwide, Inc.		882,108		40,947,453
State Street Corp.		1,481,556		63,277,257
Stryker Corp.		1,761,120		84,674,650
Sun Microsystems, Inc.*		14,514,236		58,637,513
SunGard Data Systems, Inc.*		1,260,460		29,961,134
Sunoco, Inc.		332,121		24,570,312
SunTrust Banks, Inc.		1,575,957		110,963,132
Supervalu, Inc.		601,778		16,578,984
Symantec Corp.*		1,374,765	$	75,447,103
Symbol Technologies, Inc.		1,006,571		12,723,057
Synovus Financial Corp.		1,310,540		34,270,621
Sysco Corp.		2,808,278		84,023,678
T. Rowe Price Group, Inc.		561,284		28,591,807
Target Corp.		3,968,700		179,583,675
TECO Energy, Inc.		812,607		10,994,573
Tektronix, Inc.		394,266		13,109,345
Tellabs, Inc.*		1,855,182		17,049,123
Temple-Inland, Inc.		226,920		15,237,678
Tenet Healthcare Corp.*		2,102,982		22,691,176
Teradyne, Inc.*		807,012		10,813,961
Texas Instruments, Inc.		7,600,403		161,736,576
Textron, Inc.		608,839		39,130,083
The Pepsi Bottling Group, Inc.		1,143,588		31,048,414
Thermo Electron Corp.*		731,599		19,767,805
Tiffany & Co.		647,825		19,914,140
Time Warner, Inc.*		20,024,142		323,189,652
TJX Cos., Inc. (The)		2,173,648		47,907,202
Torchmark Corp.		500,051		26,592,712
Toys "R" Us, Inc.*		880,447		15,619,130
Transocean Sedco Forex, Inc.*		1,417,588		50,721,299
Tribune Co.		1,398,363		57,542,637
TXU Corp.		1,328,272		63,650,794
Tyco International Ltd.		8,797,273		269,724,390
U.S. Bancorp		8,256,384		238,609,498
Union Pacific Corp.		1,142,638		66,958,587
Unisys Corp.*		1,425,554		14,711,717
United Parcel Service Inc. (Class B)		4,950,665		375,854,487
United States Steel Corp.		500,001		18,810,038
United Technologies Corp.		2,257,460		210,801,615
UnitedHealth Group, Inc.		2,937,336		216,599,157
Univision Communications, Inc. (Class A)*		1,427,021		45,108,134
Unocal Corp.		1,157,098		49,755,214
UnumProvident Corp.		1,282,936		20,129,266
UST, Inc.		741,630		29,858,024
V.F. Corp.		476,208		23,548,486
Valero Energy Corp.		555,756		44,577,189
VERITAS Software Corp.*		1,888,042		33,607,148
Verizon Communications Inc.		12,156,500		478,722,970
Viacom, Inc.		7,627,071		255,964,503
Visteon Corp.		596,608		4,766,898
Vulcan Materials Co.		461,369		23,506,751
W.W. Grainger, Inc.		402,285		23,191,730
Wachovia Corp.		5,752,629		270,085,932
Wal-Mart Stores, Inc.		18,634,599		991,360,667
Walgreen Co.		4,516,555		161,828,166
Washington Mutual, Inc.		3,808,457		148,834,500
Waste Management, Inc.		2,543,435		69,537,513
Waters Corp.*		535,133		23,599,365

(*) Non-income producing security

The accompanying notes are an integral part of these financial statements.

SPDR Trust Series 1
Schedule of Investments (continued)
September 30, 2004


Common Stocks	Shares		Value
Watson Pharmaceuticals, Inc.*		474,209	$	13,970,197
Wellpoint Health Networks, Inc.*		684,670		71,951,970
Wells Fargo & Co.		7,411,487		441,946,970
Wendy's International, Inc.		480,128		16,132,301
Weyerhaeuser Co.		1,061,120		70,543,258
Whirlpool Corp.		288,916		17,360,962
Williams Companies Inc. (The)		2,297,853		27,804,021
Winn-Dixie Stores, Inc.		631,117		1,950,152
Worthington Industries, Inc.		391,173		8,351,544
Wrigley (Wm.) Jr. Co.		990,827		62,729,257
Wyeth		5,868,227		219,471,690
Xcel Energy, Inc.		1,693,314		29,328,198
Xerox Corp.*		3,691,221		51,972,392
Xilinx, Inc.		1,497,008		40,419,216
XL Capital Ltd.		598,352		44,272,064
Yahoo!, Inc.*		5,979,435		202,762,641
Yum Brands, Inc.		1,271,061		51,681,340
Zimmer Holdings, Inc.*		1,071,528		84,693,573
Zions Bancorp		393,123		23,996,228
Total Common Stocks (Cost $55,165,035,690)			$	45,686,953,816

The accompanying notes are an integral part of these financial statements.

THE TRUST

The Trust, an exchange traded fund or "ETF", is a registered investment company which both (a) continuously issues and redeems "in-kind" its shares, known as SPDRs, only in large lot sizes called Creation Units at their once-daily NAV and (b) lists SPDRs individually for trading on the American Stock Exchange at prices established throughout the trading day, like any other listed equity security trading in the secondary market on the Exchange.

Creation of Creation Units

Portfolio Deposits may be made through the SPDR Clearing Process or outside the SPDR Clearing Process only by a person who executed a Participant Agreement with the Distributor and the Trustee. The Distributor shall reject any order that is not submitted in proper form. A creation order is deemed received by the Distributor on the date on which it is placed ("Transmittal Date") if (a) such order is received by the Distributor not later than the Closing Time on such Transmittal Date and (b) all other procedures set forth in the Participant Agreement are properly followed. The Transaction Fee is charged at the time of creation of a Creation Unit, and an additional amount not to exceed three (3) times the Transaction Fee applicable for one Creation Unit is charged for creations outside the SPDR Clearing Process, in part due to the increased expense associated with settlement.

The Trustee, at the direction of the Sponsor, may increase *, reduce or waive the Transaction Fee (and/or the additional amounts charged in connection with creations and/or redemptions outside the SPDR Clearing Process) for certain lot-size creations and/or redemptions of Creation Units. The Sponsor has the right to vary the lot-size of Creation Units subject to such an increase, a reduction or waiver. The existence of any such variation shall be disclosed in the then current SPDR Prospectus.

The Trustee makes available to NSCC** before the commencement of trading on each Business Day a list of the names and required number of shares of each Index Security in the current Portfolio Deposit as well as the amount of the Dividend Equivalent Payment for the previous Business Day. The identity and weightings of the Index Securities to be delivered as part of a Portfolio Deposit are determined daily, reflect the relative weighting of the current S&P 500 Index and, together with the Cash Component, have a value

*	Such increase is subject to the 10 Basis Point Limit.

As of December 31, 2004, the Depository Trust and Clearing Corporation ("DTCC") owned 100% of the issued and outstanding shares of common stock of NSCC. Also, as of such date, the Exchange owned 3.71% of the issued and outstanding shares of common stock of DTCC ("DTCC Shares"), and the Trustee owned 4.65% of DTCC Shares.

equal to the NAV of the Trust on a per Creation Unit basis at the close of business on the day of the creation request. The identity of each Index Security required for a Portfolio Deposit, as in effect on September 30, 2004, is set forth in the above Schedule of Investments. The Sponsor makes available (a) on each Business Day, the Dividend Equivalent Payment effective through and including the previous Business Day, per outstanding SPDR, and (b) every 15 seconds throughout the day at the Exchange a number representing, on a per SPDR basis, the sum of the Dividend Equivalent Payment effective through and including the previous Business Day, plus the current value of the stock portion of a Portfolio Deposit as in effect on such day (which value occasionally includes a cash in lieu amount to compensate for the omission of a particular Index Security from such Portfolio Deposit). This information is calculated based upon the best information available to the Sponsor and may be calculated by other persons designated to do so by the Sponsor. The inability of the Sponsor to provide such information will not in itself result in a halt to the trading of SPDRs on the Exchange.

Upon receipt of one or more Portfolio Deposits, following placement with the Distributor of an order to create SPDRs, the Trustee (a) delivers one or more Creation Units to DTC, (b) removes the SPDR position from its account at DTC and allocates it to the account of the DTC Participant acting on behalf of the investor creating Creation Unit(s), (c) increases the aggregate value of the Portfolio, and (d) decreases the fractional undivided interest in the Trust represented by each SPDR.

Under certain circumstances, (a) a portion of the stock portion of a Portfolio Deposit may consist of contracts to purchase certain Index Securities or (b) a portion of the Cash Component may consist of cash in an amount required to enable the Trustee to purchase such Index Securities. If there is a failure to deliver Index Securities that are the subject of such contracts to purchase, the Trustee will acquire such Index Securities in a timely manner. To the extent the price of any such Index Security increases or decreases between the time of creation and the time of its purchase and delivery, SPDRs will represent fewer or more shares of such Index Security. Therefore, price fluctuations during the period from the time the cash is received by the Trustee to the time the requisite Index Securities are purchased and delivered will affect the value of all SPDRs.

Procedures For Creation of Creation Units

All creation orders must be placed in Creation Units and must be received by the Distributor by no later than the closing time of the regular trading session on the New York Stock Exchange, Inc. ("Closing Time") (ordinarily 4:00 p.m. New York time) in each case on the date such order is placed in order for creation to be effected based on the NAV of the Trust as determined on such date. Orders must be transmitted by telephone or other transmission method acceptable to the Distributor and the Trustee, pursuant to procedures

set forth in the Participant Agreement and described in this prospectus. Severe economic or market disruptions or changes, or telephone or other communication failure, may impede the ability to reach the Distributor, the Trustee, a Participating Party or a DTC Participant.

SPDRs may be created in advance of receipt by the Trustee of all or a portion of the Portfolio Deposit. In these circumstances, the initial deposit has a value greater than the NAV of the SPDRs on the date the order is placed provided in proper form, because in addition to available Index Securities, cash collateral must be deposited with the Trustee in an amount equal to the sum of (a) the Cash Component, plus (b) 115% of the market value of the undelivered Index Securities ("Additional Cash Deposit"). The Trustee holds such Additional Cash Deposit as collateral in an account separate and apart from the Trust. The order is deemed received on the Business Day on which the order is placed if the order is placed in proper form before the Closing Time, on such date and federal funds in the appropriate amount are deposited with the Trustee by 11:00 a.m., New York time, the next Business Day. If the order is not placed in proper form by the Closing Time or federal funds in the appropriate amount are not received by 11:00 a.m. the next Business Day, the order may be deemed to be rejected and the investor shall be liable to the Trust for any losses resulting therefrom. An additional amount of cash must be deposited with the Trustee, pending delivery of the missing Index Securities to the extent necessary to maintain the Additional Cash Deposit with the Trustee in an amount at least equal to 115% of the daily mark-to-market value of the missing Index Securities. If missing Index Securities are not received by 1:00 p.m., New York time, on the third Business Day following the day on which the purchase order is deemed received and if a mark-to-market payment is not made within one Business Day following notification by the Distributor that such a payment is required, the Trustee may use the Additional Cash Deposit to purchase the missing Index Securities. The Trustee will return any unused portion of the Additional Cash Deposit once all of the missing Index Securities have been properly received or purchased by the Trustee and deposited into the Trust. In addition, a transaction fee of $4,000 is charged in all such cases. The delivery of Creation Units so created will occur no later than the third Business Day following the day on which the purchase order is deemed received. The Participant Agreement for any Participating Party intending to follow these procedures will contain terms and conditions permitting the Trustee to buy the missing portion(s) of the Portfolio Deposit at any time and will subject the Participating Party to liability for any shortfall between the cost to the Trust of purchasing such stocks and the value of such collateral. The Participating Party is liable to the Trust for the costs incurred by the Trust in connection with any such purchases. The Trust will have no liability for any such shortfall.

All questions as to the number of shares of each Index Security, the amount of the Cash Component and the validity, form, eligibility (including time of receipt) and acceptance for deposit of any Index Securities to be

delivered are resolved by the Trustee. The Trustee may reject a creation order if (a) the depositor or group of depositors, upon obtaining the SPDRs ordered, would own 80% or more of the current outstanding SPDRs, (b) the Portfolio Deposit is not in proper form; (c) acceptance of the Portfolio Deposit would have certain adverse tax consequences; (d) the acceptance of the Portfolio Deposit would, in the opinion of counsel, be unlawful; (e) the acceptance of the Portfolio Deposit would otherwise have an adverse effect on the Trust or the rights of Beneficial Owners; or (f) circumstances outside the control of the Trustee make it for all practical purposes impossible to process creations of SPDRs. The Trustee and the Sponsor are under no duty to give notification of any defects or irregularities in the delivery of Portfolio Deposits or any component thereof and neither of them shall incur any liability for the failure to give any such notification.

Placement of Creation Orders Using SPDR Clearing Process

Creation Units created through the SPDR Clearing Process must be delivered through a Participating Party that has executed a Participant Agreement. The Participant Agreement authorizes the Trustee to transmit to the Participating Party such trade instructions as are necessary to effect the creation order. Pursuant to the trade instructions from the Trustee to NSCC, the Participating Party agrees to transfer the requisite Index Securities (or contracts to purchase such Index Securities that are expected to be delivered through the SPDR Clearing Process in a "regular way" manner by the third NSCC Business Day) and the Cash Component to the Trustee, together with such additional information as may be required by the Trustee.

Placement of Creation Orders Outside SPDR Clearing Process

Creation Units created outside the SPDR Clearing Process must be delivered through a DTC Participant that has executed a Participant Agreement and has stated in its order that it is not using the SPDR Clearing Process and that creation will instead be effected through a transfer of stocks and cash. The requisite number of Index Securities must be delivered through DTC to the account of the Trustee by no later than 11:00 a.m. of the next Business Day immediately following the Transmittal Date. The Trustee, through the Federal Reserve Bank wire transfer system, must receive the Cash Component no later than 2:00 p.m. on the next Business Day immediately following the Transmittal Date. If the Trustee does not receive both the requisite Index Securities and the Cash Component in a timely fashion, the order will be cancelled. Upon written notice to the Distributor, the cancelled order may be resubmitted the following Business Day using a Portfolio Deposit as newly constituted to reflect the current NAV of the Trust. The delivery of SPDRs so created will occur no later than the third (3rd) Business Day following the day on which the creation order is deemed received by the Distributor.

Securities Depository; Book-Entry-Only System

DTC acts as securities depository for SPDRs. SPDRs are represented by one or more global securities, registered in the name of Cede & Co., as nominee for DTC and deposited with, or on behalf of, DTC.

DTC is a limited-purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds securities of its participants ("DTC Participants") and to facilitate the clearance and settlement of securities transactions among the DTC Participants through electronic book-entry changes in their accounts, thereby eliminating the need for physical movement of securities certificates. DTC Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations, some of whom (and/or their representatives) own DTC. * Access to DTC system also is available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a DTC Participant, either directly or indirectly ("Indirect Participants").

Upon the settlement date of any creation, transfer or redemption of SPDRs, DTC credits or debits, on its book-entry registration and transfer system, the amount of SPDRs so created, transferred or redeemed to the accounts of the appropriate DTC Participants. The accounts to be credited and charged are designated by the Trustee to NSCC, in the case of a creation or redemption through the SPDR Clearing Process, or by the Trustee and the DTC Participant, in the case of a creation or redemption outside of the SPDR Clearing Process. Beneficial ownership of SPDRs is limited to DTC Participants, Indirect Participants and persons holding interests through DTC Participants and Indirect Participants. Ownership of beneficial interests in SPDRs (owners of such beneficial interests are referred to herein as "Beneficial Owners") is shown on, and the transfer of ownership is effected only through, records maintained by DTC (with respect to DTC Participants) and on the records of DTC Participants (with respect to Indirect Participants and Beneficial Owners that are not DTC Participants). Beneficial Owners are expected to receive from or through the DTC Participant a written confirmation relating to their purchase of SPDRs. The laws of some jurisdictions may require that certain purchasers of securities take physical delivery of such securities in definitive form. Such laws may impair the ability of certain investors to acquire beneficial interests in SPDRs.

As long as Cede & Co., as nominee of DTC, is the registered owner of SPDRs, references to the registered or record owner of SPDRs shall mean

*	As of December 31, 2004, DTCC owned 100% of the issued and outstanding shares of the common stock of DTC.

Cede & Co. and shall not mean the Beneficial Owners of SPDRs. Beneficial Owners of SPDRs are not entitled to have SPDRs registered in their names, will not receive or be entitled to receive physical delivery of certificates in definitive form and will not be considered the record or registered holders thereof under the Trust Agreement. Accordingly, each Beneficial Owner must rely on the procedures of DTC, the DTC Participant and any Indirect Participant through which such Beneficial Owner holds its interests, to exercise any rights under the Trust Agreement.

The Trustee recognizes DTC or its nominee as the owner of all SPDRs for all purposes except as expressly set forth in the Trust Agreement. Pursuant to the agreement between the Trustee and DTC ("Depository Agreement"), DTC is required to make available to the Trustee upon request and for a fee to be charged to the Trust a listing of the SPDR holdings of each DTC Participant. The Trustee inquires of each such DTC Participant as to the number of Beneficial Owners holding SPDRs, directly or indirectly, through the DTC Participant. The Trustee provides each such DTC Participant with copies of such notice, statement or other communication, in the form, number and at the place as the DTC Participant may reasonably request, in order that said notice, statement or communication may be transmitted by the DTC Participant, directly or indirectly, to the Beneficial Owners. In addition, the Trust pays to each such DTC Participant a fair and reasonable amount as reimbursement for the expense attendant to such transmittal, all subject to applicable statutory and regulatory requirements.

Distributions are made to DTC or its nominee, Cede & Co. DTC or Cede & Co., upon receipt of any payment of distributions in respect of SPDRs, is required immediately to credit DTC Participants' accounts with payments in amounts proportionate to their respective beneficial interests in SPDRs, as shown on the records of DTC or its nominee. Payments by DTC Participants to Indirect Participants and Beneficial Owners of SPDRs held through such DTC Participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in a "street name," and will be the responsibility of such DTC Participants. Neither the Trustee nor the Sponsor has or will have any responsibility or liability for any aspects of the records relating to or notices to Beneficial Owners, or payments made on account of beneficial ownership interests in SPDRs, or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests or for any other aspect of the relationship between DTC and the DTC Participants or the relationship between such DTC Participants and the Indirect Participants and Beneficial Owners owning through such DTC Participants.

DTC may discontinue providing its service with respect to SPDRs at any time by giving notice to the Trustee and the Sponsor and discharging its responsibilities with respect thereto under applicable law. Under such circumstances, the Trustee and the Sponsor shall take action either to find a

replacement for DTC to perform its functions at a comparable cost or, if such a replacement is unavailable, to terminate the Trust.

REDEMPTION OF SPDRS

SPDRs are redeemable only in Creation Units. Creation Units are redeemable in kind only and are not redeemable for cash except as described under "Summary—Highlights—Termination of the Trust."

Procedures For Redemption of Creation Units

Redemption orders must be placed with a Participating Party (for redemptions through the SPDR Clearing Process) or DTC Participant (for redemptions outside the SPDR Clearing Process), as applicable, in the form required by such Participating Party or DTC Participant. A particular broker may not have executed a Participant Agreement, and redemption orders may have to be placed by the broker through a Participating Party or a DTC Participant who has executed a Participant Agreement. At any given time, there may be only a limited number of broker-dealers that have executed a Participant Agreement. Redeemers should afford sufficient time to permit (a) proper submission of the order by a Participating Party or DTC Participant to the Trustee and (b) the receipt of the SPDRs to be redeemed and any Excess Cash Amounts by the Trustee in a timely manner. Orders for redemption effected outside the SPDR Clearing Process are likely to require transmittal by the DTC Participant earlier on the Transmittal Date than orders effected using the SPDR Clearing Process. These deadlines vary by institution. Persons redeeming outside the SPDR Clearing Process are required to transfer SPDRs through DTC and the Excess Cash Amounts, if any, through the Federal Reserve Bank wire transfer system in a timely manner.

Requests for redemption may be made on any Business Day to the Trustee and not to the Distributor. In the case of redemptions made through the SPDR Clearing Process, the Transaction Fee is deducted from the amount delivered to the redeemer. In the case of redemptions outside the SPDR Clearing Process, the Transaction Fee plus an additional amount not to exceed three (3) times the Transaction Fee applicable for one Creation Unit per Creation Unit redeemed, and such amount is deducted from the amount delivered to the redeemer.

The Trustee transfers to the redeeming Beneficial Owner via DTC and the relevant DTC Participant(s) a portfolio of stocks for each Creation Unit delivered, generally identical in weighting and composition to the stock portion of a Portfolio Deposit as in effect (a) on the date a request for redemption is deemed received by the Trustee or (b) in the case of the termination of the Trust, on the date that notice of the termination of the Trust is given. The Trustee also transfers via the relevant DTC Participant(s) to the redeeming Beneficial Owner a "Cash Redemption Payment," which on any given

Business Day is an amount identical to the amount of the Cash Component and is equal to a proportional amount of the following: dividends on the Portfolio Securities for the period through the date of redemption, net of expenses and liabilities for such period including, without limitation, (i) taxes or other governmental charges against the Trust not previously deducted if any, and (ii) accrued fees of the Trustee and other expenses of the Trust, as if the Portfolio Securities had been held for the entire accumulation period for such distribution, plus or minus the Balancing Amount. The redeeming Beneficial Owner must deliver to the Trustee any amount by which the amount payable to the Trust by such Beneficial Owner exceeds the amount of the Cash Redemption Payment ("Excess Cash Amounts"). For redemptions through the SPDR Clearing Process, the Trustee effects a transfer of the Cash Redemption Payment and stocks to the redeeming Beneficial Owner by the third (3rd) NSCC Business Day following the date on which request for redemption is deemed received. For redemptions outside the SPDR Clearing Process, the Trustee transfers the Cash Redemption Payment and the stocks to the redeeming Beneficial Owner by the third (3rd) Business Day following the date on which the request for redemption is deemed received. The Trustee will cancel all SPDRs delivered upon redemption.

If the Trustee determines that an Index Security is likely to be unavailable or available in insufficient quantity for delivery by the Trust upon redemption, the Trustee may elect to deliver the cash equivalent value of any such Index Securities, based on its market value as of the Evaluation Time on the date such redemption is deemed received by the Trustee as a part of the Cash Redemption Payment in lieu thereof.

If a redeemer is restricted by regulation or otherwise from investing or engaging in a transaction in one or more Index Securities, the Trustee may elect to deliver the cash equivalent value based on the market value of any such Index Securities as of the Evaluation Time on the date of the redemption as a part of the Cash Redemption Payment in lieu thereof. In such case, the investor will pay the Trustee the standard Transaction Fee, and may pay an additional amount equal to the actual amounts incurred in connection with such transaction(s) but in any case not to exceed three (3) times the Transaction Fee applicable for one Creation Unit.

The Trustee upon the request of a redeeming investor, may elect to redeem Creation Units in whole or in part by providing such redeemer, with a portfolio of stocks differing in exact composition from Index Securities but not differing in NAV from the then-current Portfolio Deposit. Such a redemption is likely to be made only if it were determined that it would be appropriate in order to maintain the Trust's correspondence to the composition and weighting of the S&P 500 Index.

The Trustee may sell Portfolio Securities to obtain sufficient cash proceeds to deliver to the redeeming Beneficial Owner. To the extent cash proceeds are

received by the Trustee in excess of the required amount, such cash proceeds shall be held by the Trustee and applied in accordance with the guidelines applicable to Misweighting.

All redemption orders must be transmitted to the Trustee by telephone or other transmission method acceptable to the Trustee so as to be received by the Trustee not later than the Closing Time on the Transmittal Date, pursuant to procedures set forth in the Participant Agreement. Severe economic or market disruption or changes, or telephone or other communication failure, may impede the ability to reach the Trustee, a Participating Party, or a DTC Participant.

The calculation of the value of the stocks and the Cash Redemption Payment to be delivered to the redeeming Beneficial Owner is made by the Trustee according to the procedures set forth under "Valuation" and is computed as of the Evaluation Time on the Business Day on which a redemption order is deemed received by the Trustee. Therefore, if a redemption order in proper form is submitted to the Trustee by a DTC Participant not later than the Closing Time on the Transmittal Date, and the requisite SPDRs are delivered to the Trustee prior to DTC Cut-Off Time on such Transmittal Date, then the value of the stocks and the Cash Redemption Payment to be delivered to the Beneficial Owner is determined by the Trustee as of the Evaluation Time on such Transmittal Date. If, however, a redemption order is submitted not later than the Closing Time on a Transmittal Date but either (a) the requisite SPDRs are not delivered by DTC Cut-Off Time on the next Business Day immediately following such Transmittal Date or (b) the redemption order is not submitted in proper form, then the redemption order is not deemed received as of such Transmittal Date. In such case, the value of the stocks and the Cash Redemption Payment to be delivered to the Beneficial Owner is computed as of the Evaluation Time on the Business Day that such order is deemed received by the Trustee, i.e. , the Business Day on which the SPDRs are delivered through DTC to the Trustee by DTC Cut-Off Time on such Business Day pursuant to a properly submitted redemption order.

The Trustee may suspend the right of redemption, or postpone the date of payment of the NAV for more than five (5) Business Days following the date on which the request for redemption is deemed received by the Trustee (a) for any period during which the New York Stock Exchange is closed, (b) for any period during which an emergency exists as a result of which disposal or evaluation of the Securities is not reasonably practicable, (c) or for such other period as the SEC may by order permit for the protection of Beneficial Owners. Neither the Sponsor nor the Trustee is liable to any person or in any way for any loss or damages that may result from any such suspension or postponement.

Placement of Redemption Orders Using SPDR Clearing Process

A redemption order made through the SPDR Clearing Process is deemed received on the Transmittal Date if (a) such order is received by the Trustee not later than the Closing Time on such Transmittal Date and (b) all other procedures set forth in the Participant Agreement are properly followed. The order is effected based on the NAV of the Trust as determined as of the Evaluation Time on the Transmittal Date. A redemption order made through the SPDR Clearing Process and received by the Trustee after the Closing Time will be deemed received on the next Business Day immediately following the Transmittal Date. The Participant Agreement authorizes the Trustee to transmit to NSCC on behalf of the Participating Party such trade instructions as are necessary to effect the Participating Party's redemption order. Pursuant to such trade instructions from the Trustee to NSCC, the Trustee transfers the requisite stocks (or contracts to purchase such stocks which are expected to be delivered in a "regular way" manner) by the third (3rd) NSCC Business Day following the date on which the request for redemption is deemed received, and the Cash Redemption Payment.

Placement of Redemption Orders Outside SPDR Clearing Process

A DTC Participant who wishes to place an order for redemption of SPDRs to be effected outside the SPDR Clearing Process need not be a Participating Party, but its order must state that the DTC Participant is not using the SPDR Clearing Process and that redemption will instead be effected through transfer of SPDRs directly through DTC. An order is deemed received by the Trustee on the Transmittal Date if (a) such order is received by the Trustee not later than the Closing Time on such Transmittal Date, (b) such order is preceded or accompanied by the requisite number of SPDRs specified in such order, which delivery must be made through DTC to the Trustee no later than 11:00 a.m. on the next Business Day immediately following such Transmittal Date ("DTC Cut-Off Time") and (c) all other procedures set forth in the Participant Agreement are properly followed. Any Excess Cash Amounts owed by the Beneficial Owner must be delivered no later than 2:00 p.m. on the next Business Day immediately following the Transmittal Date.

The Trustee initiates procedures to transfer the requisite stocks (or contracts to purchase such stocks) that are expected to be delivered within three Business Days and the Cash Redemption Payment to the redeeming Beneficial Owner by the third Business Day following the Transmittal Date.

THE PORTFOLIO

Because the objective of the Trust is to provide investment results that, before expenses, generally correspond to the price and yield performance of the S&P 500 Index, the Portfolio at any time will consist of as many of Index Securities as is practicable. It is anticipated that cash or cash items (other than

dividends held for distribution) normally would not be a substantial part of the Trust's net assets. Although the Trust may at any time fail to own certain of Index Securities, the Trust will be substantially invested in Index Securities and the Sponsor believes that such investment should result in a close correspondence between the investment performance of the S&P 500 Index and that derived from ownership of SPDRs.

Portfolio Securities Conform to the S&P 500 Index

The S&P 500 Index is a float-adjusted capitalization weighted index of 500 securities calculated under the auspices of the S&P Index Committee of S&P. At any moment in time, the value of the S&P 500 Index equals the aggregate market value of the available float shares outstanding in each of the component 500 Index Securities, evaluated at their respective last sale prices on the NYSE, the Exchange or NASDAQ, divided by a scaling factor ("divisor") which yields a resulting index value in the reported magnitude.

Periodically (typically, several times per quarter), S&P may determine that total shares outstanding have changed in one or more component Index Securities due to secondary offerings, repurchases, conversions or other corporate actions. Second, periodically S&P may determine the available float shares of each of the Index Securities may have changed due to corporate actions, purchases or sales of securities by holders or other events. Additionally, the S&P Committee may periodically (ordinarily, several times per quarter) replace one or more component securities in the S&P Index due to mergers, acquisitions, bankruptcies, or other market conditions, or if the issuers of such component securities fail to meet the criteria for inclusion in the S&P 500 Index. In 2004, there were 20 company changes to the S&P 500 Index. Ordinarily, whenever there is a change in shares outstanding or a change in a component security of the S&P 500 Index, S&P adjusts the divisor to ensure that there is no discontinuity in the value of the S&P 500 Index.

The Trust is not managed and therefore the adverse financial condition of an issuer does not require the sale of stocks from the Portfolio. The Trustee on a non-discretionary basis adjusts the composition of the Portfolio to conform to changes in the composition and/or weighting structure of Index Securities. To the extent that the method of determining the S&P 500 Index is changed by S&P in a manner that would affect the adjustments provided for herein, the Trustee and the Sponsor have the right to amend the Trust Agreement, without the consent of DTC or Beneficial Owners, to conform the adjustments to such changes and to maintain the objective of tracking the S&P 500 Index.

The Trustee aggregates certain of these adjustments and makes conforming changes to the Portfolio at least monthly. The Trustee directs its stock transactions only to brokers or dealers, which may include affiliates of the Trustee, from whom it expects to obtain the most favorable prices or execution of orders. Adjustments are made more frequently in the case of significant

changes to the S&P 500 Index. Specifically, the Trustee is required to adjust the composition of the Portfolio whenever there is a change in the identity of any Index Security ( i.e. , a substitution of one security for another) within three (3) Business Days before or after the day on which the change is scheduled to take effect. If the transaction costs incurred by the Trust in adjusting the Portfolio would exceed the expected variation between the composition of the Portfolio and the S&P 500 Index ("Misweighting"), it may not be efficient identically to replicate the share composition of the S&P 500 Index. Minor Misweighting generally is permitted within the guidelines set forth below. The Trustee is required to adjust the composition of the Portfolio at any time that the weighting of any stock in the Portfolio varies in excess of one hundred and fifty percent (150%) of a specified percentage, which percentage varies from 8/100 of 1% to 2/100 of 1%, depending on the NAV of the Trust (in each case, "Misweighting Amount"), from the weighting of the Index Security in the S&P 500 Index.

The Trustee examines each stock in the Portfolio on each Business Day, comparing its weighting to the weighting of the corresponding Index Security, based on prices at the close of the market on the preceding Business Day (a "Weighting Analysis"). If there is a Misweighting in any stock in the Portfolio in excess of one hundred and fifty percent (150%) of the applicable Misweighting Amount, the Trustee calculates an adjustment to the Portfolio in order to bring the Misweighting within the Misweighting Amount, based on prices at the close of the market on the day on which such Misweighting occurs. Also, on a monthly basis, the Trustee performs a Weighting Analysis for each stock in the Portfolio, and in any case where there exists a Misweighting exceeding one hundred percent (100%) of the applicable Misweighting Amount, the Trustee calculates an adjustment to the Portfolio in order to bring the Misweighting within the applicable Misweighting Amount, based on prices at the close of the market on the day on which such Misweighting occurs. In the case of any adjustment to the Portfolio because of a Misweighting, the purchase or sale of stock necessitated by the adjustment is made within three (3) Business Days of the day on which such Misweighting is determined. In addition to the foregoing adjustments, the Trustee may make additional periodic adjustments to Portfolio Securities that may be misweighted by an amount within the applicable Misweighting Amount.

The foregoing guidelines with respect to Misweighting also apply to any Index Security that (a) is likely to be unavailable for delivery or available in insufficient quantity for delivery or (b) cannot be delivered to the Trustee due to restrictions prohibiting a creator from engaging in a transaction involving such Index Security. Upon receipt of an order for a Creation Unit that involves such an Index Security, the Trustee determines whether the substitution of cash for the stock would cause a Misweighting in the Portfolio. If a Misweighting results, the Trustee will purchase the required number of shares of the Index Security on the opening of the market on the following Business Day. If a

Misweighting does not result and the Trustee does not hold cash in excess of the permitted amounts, the Trustee may hold the cash or, if such excess would result, make the required adjustments to the Portfolio.

As a result of the purchase and sale of stock in accordance with these requirements, or the creation of Creation Units, the Trust may hold some amount of residual cash (other than cash held temporarily due to timing differences between the sale and purchase of stock or cash delivered in lieu of Index Securities or undistributed income or undistributed capital gains). This amount may not exceed for more than two (2) consecutive Business Days 5/10th of 1 percent of the value of the Portfolio. If the Trustee has made all required adjustments and is left with cash in excess of 5/10th of 1 percent of the value of the Portfolio, the Trustee will use such cash to purchase additional Index Securities that are under-weighted in the Portfolio as compared to their relative weightings in the S&P 500 Index, although the Misweighting of such Index Securities may not be in excess of the applicable Misweighting Amount.

All portfolio adjustments are made as described herein unless such adjustments would cause the Trust to lose its status as a "regulated investment company" under Subchapter M of the Code. Additionally, the Trustee is required to adjust the composition of the Portfolio at any time to insure the continued qualification of the Trust as a regulated investment company.

The Trustee relies on industry sources for information as to the composition and weightings of Index Securities. If the Trustee becomes incapable of obtaining or processing such information or NSCC is unable to receive such information from the Trustee on any Business Day, the Trustee shall use the composition and weightings of Index Securities for the most recently effective Portfolio Deposit for the purposes of all adjustments and determinations (including, without limitation, determination of the stock portion of the Portfolio Deposit) until the earlier of (a) such time as current information with respect to Index Securities is available or (b) three (3) consecutive Business Days have elapsed. If such current information is not available and three (3) consecutive Business Days have elapsed, the composition and weightings of Portfolio Securities (as opposed to Index Securities) shall be used for the purposes of all adjustments and determinations (including, without limitation, determination of the stock portion of the Portfolio Deposit) until current information with respect to Index Securities is available.

If the Trust is terminated, the Trustee shall use the composition and weightings of Portfolio Securities as of such notice date for the purpose and determination of all redemptions or other required uses of the basket.

From time to time S&P may adjust the composition of the S&P 500 Index because of a merger or acquisition involving one or more Index Securities. In such cases, the Trust, as shareholder of an issuer that is the object of such merger or acquisition activity, may receive various offers from would-be acquirors of the issuer. The Trustee is not permitted to accept any such offers

until such time as it has been determined that the stocks of the issuer will be removed from the S&P 500 Index. As stocks of an issuer are often removed from the S&P 500 Index only after the consummation of a merger or acquisition of such issuer, in selling the securities of such issuer the Trust may receive, to the extent that market prices do not provide a more attractive alternative, whatever consideration is being offered to the shareholders of such issuer that have not tendered their shares prior to such time. Any cash received in such transactions is reinvested in Index Securities in accordance with the criteria set forth above. Any stocks received as a part of the consideration that are not Index Securities are sold as soon as practicable and the cash proceeds of such sale are reinvested in accordance with the criteria set forth above.

Adjustments to the Portfolio Deposit

On each Business Day (each such day an "Adjustment Day"), the number of shares and identity of each Index Security in a Portfolio Deposit are adjusted in accordance with the following procedure. At the close of the market the Trustee calculates the NAV of the Trust. The NAV is divided by the number of outstanding SPDRs multiplied by 50,000 SPDRs in one Creation Unit, resulting in an NAV per Creation Unit ("NAV Amount"). The Trustee then calculates the number of shares (without rounding) of each of the component stocks of the S&P 500 Index in a Portfolio Deposit for the following Business Day ("Request Day"), so that (a) the market value at the close of the market on the Adjustment Day of the stocks to be included in the Portfolio Deposit on Request Day, together with the Dividend Equivalent Payment effective for requests to create or redeem on the Adjustment Day, equals the NAV Amount and (b) the identity and weighting of each of the stocks in a Portfolio Deposit mirrors proportionately the identity and weightings of the stocks in the S&P 500 Index, each as in effect on Request Day. For each stock, the number resulting from such calculation is rounded to the nearest whole share, with a fraction of 0.50 being rounded up. The identities and weightings of the stocks so calculated constitute the stock portion of the Portfolio Deposit effective on Request Day and thereafter until the next subsequent Adjustment Day, as well as Portfolio Securities to be delivered by the Trustee in the event of request for redemption on the Request Day and thereafter until the following Adjustment Day.

In addition to the foregoing adjustments, if a corporate action such as a stock split, stock dividend or reverse split occurs with respect to any Index Security that does not result in an adjustment to the S&P 500 Index divisor, the Portfolio Deposit shall be adjusted to take into account the corporate action in each case rounded to the nearest whole share.

On the Request Day and on each day that a request for the creation or redemption is deemed received, the Trustee calculates the market value of the stock portion of the Portfolio Deposit as in effect on the Request Day as of the close of the market and adds to that amount the Dividend Equivalent Payment

effective for requests to create or redeem on Request Day (such market value and Dividend Equivalent Payment are collectively referred to herein as "Portfolio Deposit Amount"). The Trustee then calculates the NAV Amount, based on the close of the market on the Request Day. The difference between the NAV Amount so calculated and the Portfolio Deposit Amount is the "Balancing Amount". The Balancing Amount serves the function of compensating for any differences between the value of the Portfolio Deposit Amount and the NAV Amount at the close of trading on Request Day due to, for example, (a) differences in the market value of the securities in the Portfolio Deposit and the market value of the Securities on Request Day and (b) any variances from the proper composition of the Portfolio Deposit.

On any Adjustment Day on which (a) no change in the identity and/or share weighting of any Index Security is scheduled to take effect that would cause the S&P 500 Index divisor to be adjusted after the close of the market on that Business Day, * and (b) no stock split, stock dividend or reverse stock split with respect to any Index Security has been declared to take effect on the corresponding Request Day, the Trustee may forego making any adjustment to the stock portion of the Portfolio Deposit and to use the composition and weightings of Index Securities for the most recently effective Portfolio Deposit for the Request Day following such Adjustment Day. In addition, the Trustee may calculate the adjustment to the number of shares and identity of Index Securities in a Portfolio Deposit as described above except that such calculation would be employed two (2) Business Days rather than one (1) Business Day before the Request Day.

The Dividend Equivalent Payment and the Balancing Amount in effect at the close of business on the Request Date are collectively referred to as the Cash Component or the Cash Redemption Payment. If the Balancing Amount is a positive number ( i.e. , if the NAV Amount exceeds the Portfolio Deposit Amount) then, with respect to creation, the Balancing Amount increases the Cash Component of the then effective Portfolio Deposit transferred to the Trustee by the creator. With respect to redemptions, the Balancing Amount is added to the cash transferred to the redeemer by the Trustee. If the Balancing Amount is a negative number ( i.e. , if the NAV Amount is less than the Portfolio Deposit Amount) then, with respect to creation, this amount decreases the Cash Component of the then effective Portfolio Deposit to be transferred to the Trustee by the creator or, if such cash portion is less than the Balancing Amount, the difference must be paid by the Trustee to the creator. With respect to redemptions, the Balancing Amount is deducted from the cash

*	S&P publicly announces changes in the identity and/or weighting of Index Securities in advance of the actual change. The announcements regarding changes in the index components are made after the close of trading on such day.

transferred to the redeemer or, if such cash is less than the Balancing Amount, the difference must be paid by the redeemer to the Trustee.

If the Trustee has included the cash equivalent value of one or more Index Securities in the Portfolio Deposit because the Trustee has determined that such Index Securities are likely to be unavailable or available in insufficient quantity for delivery, of if a creator or redeemer is restricted from investing or engaging in transactions in one or more of such Index Securities, the Portfolio Deposit so constituted shall determine the Index Securities to be delivered in connection with the creation of SPDRs in Creation Unit size aggregations and upon the redemption of SPDRs until the time the stock portion of the Portfolio Deposit is subsequently adjusted.

THE S&P 500 INDEX

The S&P 500 Index is composed of 500 selected stocks, all of which are listed on the Exchange, the NYSE or NASDAQ, and spans over 24 separate industry groups. As of December 31, 2004, the five largest industry segments comprising the S&P 500 Index were: Capital Goods (9.02%), Pharmaceuticals & Biotechnology (8.20%), Diversified Financials (7.98%), Banks (7.85%) and Energy (7.16%). Since 1968, the S&P 500 Index has been a component of the U.S. Commerce Department's list of Leading Indicators that track key sectors of the U.S. economy. Current information regarding the market value of the S&P 500 Index is available from market information services. The S&P 500 Index is determined, comprised and calculated without regard to the Trust.

S&P is not responsible for and does not participate in the creation or sale of SPDRs or in the determination of the timing, pricing, or quantities and proportions of purchases or sales of Index Securities or Portfolio Securities. The information in this Prospectus concerning S&P and the S&P 500 Index has been obtained from sources that the Sponsor believes to be reliable, but the Sponsor takes no responsibility for the accuracy of such information.

The following table shows the actual performance of the S&P 500 Index for the years 1960 through 2004. Stock prices fluctuated widely during this period and were higher at the end than at the beginning. The results shown should not be considered representative of the income yield or capital gain or loss that may be generated by the S&P 500 Index in the future. The results should not be considered representative of the performance of the Trust.


Year	Calendar Year-End Index Value*		Calendar Year-End Index Value 1960=100		Change in Index for Calendar Year			Calendar Year-End Yield**
1960		58.11		100.00		—	%		3.47	%
1961		71.55		123.13		23.13			2.98
1962		63.10		108.59		−11.81			3.37
1963		75.02		129.10		18.89			3.17
1964		84.75		145.84		12.97			3.01
1965		92.43		159.06		9.06			3.00
1966		80.33		138.24		−13.09			3.40
1967		96.47		166.01		20.09			3.20
1968		103.86		178.73		7.66			3.07
1969		92.06		158.42		−11.36			3.24
1970		92.15		158.58		0.10			3.83
1971		102.09		175.68		10.79			3.14
1972		118.05		203.15		15.63			2.84
1973		97.55		167.87		−17.37			3.06
1974		68.56		117.98		−29.72			4.47
1975		90.19		155.21		31.55			4.31
1976		107.46		184.93		19.15			3.77
1977		95.10		163.66		−11.50			4.62
1978		96.11		165.39		1.06			5.28
1979		107.94		185.75		12.31			5.47
1980		135.76		233.63		25.77			5.26
1981		122.55		210.89		−9.73			5.20
1982		140.64		242.02		14.76			5.81
1983		164.93		283.82		17.27			4.40
1984		167.24		287.80		1.40			4.64
1985		211.28		363.59		26.33			4.25
1986		242.17		416.75		14.62			3.49
1987		247.08		425.19		2.03			3.08
1988		277.72		477.92		12.40			3.64
1989		353.40		608.15		27.25			3.45
1990		330.22		568.26		−6.56			3.61
1991		417.09		717.76		26.31			3.24
1992		435.71		749.80		4.46			2.99
1993		464.45		802.70		7.06			2.78
1994		459.27		790.34		−1.54			2.82
1995		615.93		1,059.92		34.11			2.56
1996		740.74		1,274.70		20.26			2.19
1997		970.43		1,669.99		31.01			1.77
1998		1,229.23		2,115.35		26.67			1.49
1999		1,469.25		2,528.39		19.53			1.14
2000		1,320.28		2,272.04		−10.14			1.19
2001		1,148.08		1,975.70		−13.04			1.36
2002		879.82		1,514.06		−23.37			1.81
2003		1,111.92		1,913.47		26.38			1.63
2004		1,211.92		2,085.56		8.99			1.72

*	Source: S&P. Year-end index values shown do not reflect reinvestment of dividends nor costs, such as brokerage charges and transaction costs.

**	Source: S&P. Yields are obtained by dividing the aggregate cash dividends by the aggregate market value of the stocks in the S&P 500 Index.

LICENSE AGREEMENT

The License Agreement grants the Sponsor a license to use the S&P 500 Index as a basis for determining the composition of the Portfolio and to use certain trade names and trademarks of S&P in connection with the Portfolio. The License Agreement may be amended without the consent of any of the Beneficial Owners of SPDRs. Currently, the License Agreement, as amended, is scheduled to terminate on January 22, 2018 but its term may be extended beyond such date without the consent of any of the Beneficial Owners of SPDRs.

None of the Trust, the Trustee, the Distributor, DTC or any Beneficial Owner of SPDRs is entitled to any rights whatsoever under the foregoing licensing arrangements or to use the trademarks "S&P", "Standard & Poor's", "Standard & Poor's 500" or "S&P 500" or to use the S&P 500 Index except as specifically described herein or as may be specified in the Trust Agreement.

The Trust is not sponsored, endorsed, sold or promoted by S&P and S&P makes no representation or warranty, express or implied, to the Trust, the Trustee, the Distributor, DTC or Beneficial Owners of SPDRs regarding the advisability of investing in Index Securities or unit investment trusts generally or in the Trust particularly or the ability of the S&P 500 Index to track general stock market performance. S&P's only relationship to the Trust is the licensing of certain trademarks and trade names of S&P and of the S&P 500 Index which is determined, comprised and calculated by S&P without regard to the Trust or the Beneficial Owners of SPDRs. S&P has no obligation to take the needs of the Trust or the Beneficial Owners of SPDRs into consideration in determining, comprising or calculating the S&P 500 Index. S&P is not responsible for and has not participated in any determination or calculation made with respect to issuance or redemption of SPDRs. S&P has no obligation or liability in connection with the administration, marketing or trading of SPDRs.

STANDARD & POOR'S DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. STANDARD & POOR'S MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE SPONSOR, THE TRUST, BENEFICIAL OWNERS OF SPDRS OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE USE LICENSED UNDER THE LICENSE AGREEMENT, OR FOR ANY OTHER USE. STANDARD & POOR'S MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL SUCH WARRANTIES, INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL STANDARD & POOR'S HAVE ANY

LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

EXCHANGE LISTING

SPDRs are listed on the Exchange. The Trust is not required to pay a listing fee to the Exchange. Transactions involving SPDRs in the public trading market are subject to customary brokerage charges and commissions.

The Sponsor's aim in designing SPDRs was to provide investors with a security whose initial market value would approximate one-tenth (1/10th) the value of the S&P 500 Index. Of course, the market value of a SPDR is affected by a variety of factors, including capital gains distributions made, and expenses incurred, by the Trust, and therefore, over time, a SPDR may no longer approximate 1/10th the value of the S&P 500 Index. The market price of a SPDR should reflect its share of the dividends accumulated on Portfolio Securities and may be affected by supply and demand, market volatility, sentiment and other factors. There can be no assurance that SPDRs will always be listed on the Exchange. The Trust will be terminated if SPDRs are delisted. The Exchange will consider the suspension of trading in or removal from listing of SPDRs if: (a) the Trust has more than 60 days remaining until termination and there are fewer than 50 record and/or beneficial holders of SPDRs for 30 or more consecutive trading days; (b) the S&P 500 Index is no longer calculated or available; or (c) such other event occurs or condition exists which, in the opinion of the Exchange, makes further dealings on the Exchange inadvisable.

SPDRs also are listed and traded on the Singapore Exchange Ltd. ("SGX") in connection with a joint venture created by the Exchange and the SGX. In the future, SPDRs may be listed and traded on other non-U.S. exchanges pursuant to similar arrangements.

TAX STATUS OF THE TRUST

For the fiscal year ended September 30, 2004, the Trust believes that it qualified for tax treatment as a "regulated investment company" under Subchapter M of the Code. The Trust intends to continue to so qualify. To qualify as a regulated investment company, the Trust must, among other things, (a) derive in each taxable year at least 90% of its gross income from dividends, interest, gains from the sale or other disposition of stock, securities or foreign currencies, or certain other sources, (b) meet certain diversification tests, and (c) distribute in each year at least 90% of its investment company taxable income. If the Trust qualifies as a regulated investment company, subject to certain conditions and requirements, the Trust will not be subject to federal income tax to the extent its income is distributed in a timely manner. Any undistributed income may be subject to tax, including a four percent (4%) excise tax imposed by section 4982 of the Code on certain undistributed income of a regulated investment company that does not distribute to shareholders in a timely manner at least ninety-eight percent (98%) of its taxable income (including capital gains).

Income Tax Consequences to Beneficial Owners

Dividends paid by the Trust from its investment company taxable income (which includes dividends, interest and the excess of net short-term capital gains over net long-term capital losses) are generally taxable to Beneficial Owners as ordinary income. However, to the extent that such dividends are designated by the Trust as attributable to the receipt by the Trust of qualified dividend income, such dividends will be eligible for the 15% maximum tax rate applicable to non-corporate taxpayers through 2008. A dividend paid in January is considered for federal income tax purposes to have been paid by the Trust and received by Beneficial Owners on the preceding December 31 if the dividend was declared in the preceding October, November or December to Beneficial Owners of record as shown on the records of DTC and the DTC Participants on a date in one of those months.

Distributions paid by the Trust from the excess of net long-term capital gains over net short-term capital losses are considered "capital gains dividends" regardless of the length of time an investor has owned SPDRs. Any loss on the sale or exchange of a share held for six months or less may be treated as a long-term capital loss to the extent of any capital gain dividends received by the Beneficial Owner. For corporate investors, dividends from net investment income (but not return of capital distributions or capital gain dividends) generally qualify for the corporate dividends-received deduction to the extent dividend income received by the Trust so qualified, subject to the limitations contained in the Code. Investors should note that the regular quarterly dividends paid by the Trust are not based on the Trust's investment company taxable income and net capital gain, but rather are based on the dividends paid with respect to Portfolio Securities. As a result, a portion of the distributions

of the Trust may be treated as a return of capital or a capital gain dividend for federal income tax purposes or the Trust may make additional distributions in excess of the yield performance of Portfolio Securities in order to distribute all of its investment company taxable income and net capital gain.

Distributions in excess of the Trust's current or accumulated earnings and profits (as specially computed) generally are treated as a return of capital for federal income tax purposes and reduce a Beneficial Owner's tax basis in SPDRs. Return of capital distributions may result, for example, if a portion of the dividends declared represents cash amounts deposited in connection with Portfolio Deposits rather than dividends actually received by the Trust. Under certain circumstances, a significant portion of the Trust's regular quarterly dividends could be treated as return of capital distributions. Such circumstances may be more likely to occur in periods during which the number of outstanding SPDRs fluctuates significantly. Beneficial Owners receive annually notification from the Trustee through the DTC Participants as to the tax status of the Trust's distributions. A distribution paid shortly after a purchase or creation of SPDRs may be taxable even though in effect it may represent a return of capital.

Distributions reinvested in additional SPDRs through the means of the Service are nevertheless taxable dividends to Beneficial Owners acquiring such additional SPDRs to the same extent as if such dividends were received in cash.

The sale of SPDRs by a Beneficial Owner is a taxable event, and may result in a gain or loss, which generally should be a capital gain or loss for Beneficial Owners that are not dealers in securities.

Dividend distributions, capital gains distributions, and capital gains from sales or redemptions may also be subject to state, local and foreign taxes.

Under the Code, an in-kind redemption of SPDRs does not result in the recognition of taxable gain or loss by the Trust but generally constitutes a taxable event for the redeeming shareholder. Upon redemption, a Beneficial Owner generally recognizes gain or loss measured by the difference on the date of redemption between the aggregate value of the cash and stocks received and its tax basis in the SPDRs redeemed. Stocks received upon redemption (which will be comprised of the stock portion of the Portfolio Deposit in effect on the date of redemption) generally have an initial tax basis equal to their respective market values on the date of redemption. The Internal Revenue Service ("IRS") may assert that any resulting loss may not be deducted by a Beneficial Owner on the basis that there has been no material change in such Beneficial Owner's economic position or that the transaction has no significant economic or business utility apart from the anticipated tax consequences. Beneficial Owners of SPDRs in Creation Unit size aggregations should consult their own tax advisors as to the consequences to them of the redemption of SPDRs.

Deposits of a Portfolio Deposit with the Trustee in exchange for Creation Units do not result in the recognition of taxable gain or loss by the Trust but generally constitute a taxable event to the investor under the Code, and an investor generally recognizes gain or loss with respect to each stock deposited equal to the difference between the amount realized in respect of the stock and the investor's tax basis therein. The amount realized with respect to a stock deposited should be determined by allocating the value on the date of deposit of the SPDRs received (less any cash paid to the Trust, or plus any cash received from the Trust, in connection with the deposit) among the stocks deposited on the basis of their respective fair market values at that time. The IRS may assert that any resulting losses may not be deducted by an investor on the basis that there has been no material change in the investor's economic position or that the transaction has no significant economic or business utility or purpose apart from the anticipated tax consequences. Investors should consult their own tax advisors as to the tax consequences to them of a deposit to the Trust.

The Trustee has the right to reject the order to create Creation Units transmitted to it by the Distributor if the investor or group of investors, upon obtaining the SPDRs ordered, would own eighty percent (80%) or more of the outstanding SPDRs, and if pursuant to section 351 of the Code such a circumstance would result in the Trust having a basis in the stocks deposited different from the market value of such stocks on the date of deposit. The Trustee has the right to require information regarding SPDR ownership pursuant to the Participant Agreement and from DTC and to rely thereon to the extent necessary to make the foregoing determination as a condition to the acceptance of a Portfolio Deposit.

Subject to the exception described in the following sentence, ordinary income dividends received via DTC by Beneficial Owners who are non-resident aliens are subject to a thirty percent (30%) United States withholding tax unless a reduced rate of withholding or a withholding exemption is provided under applicable tax treaties and appropriate documentation is provided to the Trustee. Ordinary income dividends paid with respect to taxable years of the Trust beginning on or after October 1, 2005 and ending on or before November 30, 2008, will generally not be subject to withholding to the extent that such ordinary income dividends relate to either certain interest income received by the Trust or to certain short-term capital gains of the Trust, provided appropriate documentation is provided to the Trustee. The Trust does not expect to pay significant "interest-related dividends" or "short-term capital gains dividends," if any. Non-resident holders of SPDRs are urged to consult their own tax advisors concerning the applicability of United States withholding tax.

Backup withholding at a rate equal to the fourth lowest income tax rate applicable to individuals (which, under current law, is 28%) applies to dividends, capital gain distributions, redemptions and sales of SPDRs unless

the Beneficial Owner (a) is a corporation or comes within certain other exempt categories and, when required, demonstrates this fact, or (b) provides a taxpayer identification number, certifies as to no loss of exemption from backup withholding, and otherwise complies with applicable requirements of the backup withholding rules. The amount of any backup withholding from a payment to a Beneficial Owner is allowed as a credit against the holder's U.S. federal income tax liability and may entitle such holder to a refund from the IRS, if the required information is furnished to the IRS.

The tax discussion set forth above is included for general information only. Prospective investors should consult their own tax advisors concerning the federal, state, local and foreign tax consequences to them of an investment in the Trust, including the effect of possible legislative changes.

ERISA Considerations

In considering the advisability of an investment in SPDRs, fiduciaries of pension, profit sharing or other tax-qualified retirement plans (including Keogh Plans) and funded welfare plans (collectively, "Plans") subject to the fiduciary responsibility requirements of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), should consider whether an investment in SPDRs (a) is permitted by the documents and instruments governing the Plan, (b) is made solely in the interest of participants and beneficiaries of the Plans, (c) is consistent with the prudence and diversification requirements of ERISA, and that the acquisition and holding of SPDRs does not result in a non-exempt "prohibited transaction" under Section 406 of ERISA or Section 4975 of the Code. Individual retirement account ("IRA") investors should consider that an IRA may make only such investments as are authorized by the IRA's governing instruments and that IRAs are subject to the prohibited transaction rules of Section 4975 of the Code.

As described in the preceding paragraph, ERISA imposes certain duties on Plan fiduciaries, and ERISA and/or Section 4975 of the Code prohibit certain transactions involving "plan assets" between Plans or IRAs and persons who have certain specified relationships to the Plan or IRA (that is, "parties in interest" as defined in ERISA or "disqualified persons" as defined in the Code). The fiduciary standards and prohibited transaction rules that apply to an investment in SPDRs by a Plan will not apply to transactions involving the Trust's assets because the Trust is an investment company registered under the Investment Company Act of 1940. As such, the Trust's assets are not deemed to be "plan assets" under ERISA and U.S. Department of Labor regulations by virtue of a Plan's investment in SPDRs.

Employee benefit plans that are government plans (as defined in Section 3(32) of ERISA), certain church plans (as defined in Section 3(33) of ERISA) and foreign plans (as described in Section 4(b)(4) of ERISA) are not subject to the requirements of ERISA or Section 4975 of the Code. The fiduciaries of

governmental plans should, however, consider the impact of their respective state pension codes or other applicable law on investments in SPDRs and the considerations discussed above, to the extent such considerations apply.

CONTINUOUS OFFERING OF SPDRs

Creation Units are offered continuously to the public by the Trust through the Distributor. Persons making Portfolio Deposits and creating Creation Units receive no fees, commissions or other form of compensation or inducement of any kind from the Sponsor or the Distributor, and no such person has any obligation or responsibility to the Sponsor or Distributor to effect any sale or resale of SPDRs.

Because new SPDRs can be created and issued on an ongoing basis, at any point during the life of the Trust, a "distribution", as such term is used in the Securities Act of 1933 ("1933 Act"), may be occurring. Broker-dealers and other persons are cautioned that some of their activities may result in their being deemed participants in a distribution in a manner which could render them statutory underwriters and subject them to the prospectus-delivery and liability provisions of the 1933 Act. For example, a broker-dealer firm or its client may be deemed a statutory underwriter if it takes Creation Units after placing a creation order with the Distributor, breaks them down into the constituent SPDRs and sells the SPDRs directly to its customers; or if it chooses to couple the creation of a supply of new SPDRs with an active selling effort involving solicitation of secondary market demand for SPDRs. A determination of whether one is an underwriter must take into account all the facts and circumstances pertaining to the activities of the broker-dealer or its client in the particular case, and the examples mentioned above should not be considered a complete description of all the activities that could lead to categorization as an underwriter.

Dealers who are not "underwriters" but are participating in a distribution (as contrasted to ordinary secondary trading transactions), and thus dealing with SPDRs that are part of an "unsold allotment" within the meaning of Section 4(3)(C) of the 1933 Act, would be unable to take advantage of the prospectus-delivery exemption provided by Section 4(3) of the 1933 Act.

The Sponsor intends to qualify SPDRs in states selected by the Sponsor and through broker-dealers who are members of the National Association of Securities Dealers, Inc. Investors intending to create or redeem Creation Units in transactions not involving a broker-dealer registered in such investor's state of domicile or residence should consult their legal advisor regarding applicable broker-dealer or securities regulatory requirements under the state securities laws prior to such creation or redemption.

DIVIDEND REINVESTMENT SERVICE

The Trust has made the Service available for use by Beneficial Owners through DTC Participants for reinvestment of their cash proceeds. Some DTC

Participants may not elect to utilize the Service; therefore, an interested SPDR investor may wish to contact such investor's broker to ascertain the availability of the Service through such broker. Each broker may require investors to adhere to specific procedures and timetables in order to participate in the Service and such investors should ascertain from their broker such necessary details.

Distributions reinvested in additional SPDRs through the Service are nevertheless taxable dividends to Beneficial Owners to the same extent as if received in cash.

The Trustee generally uses the cash proceeds of dividends received from all Beneficial Owners participating in reinvestment through the Service to obtain Index Securities necessary to create the requisite number of SPDRs at the close of business on each SPDR distribution date. Any cash balance remaining after the requisite number of SPDRs has been created is distributed, on a pro rata basis, to all Beneficial Owners who participated in the Service. Brokerage commissions, if any, incurred in obtaining Index Securities necessary to create additional SPDRs with the cash from the distributions is an expense of the Trust. *

EXPENSES OF THE TRUST

Ordinary operating expenses of the Trust currently are being accrued at an annual rate of 0.1000%. Future accruals will depend primarily on the level of the Trust's net assets and the level of Trust expenses. The Trustee has agreed to waive a portion of its fee until February 1, 2006. Thereafter, the Trustee may discontinue this voluntary waiver policy. Therefore, there is no guarantee that the Trust's ordinary operating expenses will not exceed 0.1000% of the Trust's daily NAV.

Until further notice, the Sponsor has undertaken that it will not permit the ordinary operating expenses of the Trust, as calculated by the Trustee, to exceed an amount that is 18.45/100 of 1% (0.1845%) per annum of the daily NAV of the Trust. To the extent the ordinary operating expenses of the Trust do exceed such 0.1845% amount, the Sponsor will reimburse the Trust for, or assume, the excess. The Sponsor retains the ability to be repaid by the Trust for expenses so reimbursed or assumed to the extent that subsequently during the fiscal year expenses fall below the 0.1845% per annum level on any given day. For purposes of this undertaking, ordinary operating expenses of the Trust do not include taxes, brokerage commissions and any extraordinary non-recurring

It is difficult to estimate the annual dollar amount of brokerage commissions that might be incurred in connection with the Dividend Reinvestment Service during any fiscal year. The Trustee estimates that during fiscal year 2004, the approximate amount of annual brokerage commissions incurred in implementing the Service was less than $0.001 per SPDR.

expenses, including the cost of any litigation to which the Trust or the Trustee may be a party. The Sponsor may discontinue this undertaking or renew it for a specified period of time, or may choose to reimburse or assume certain Trust expenses in later periods to keep Trust expenses at a level it believes to be attractive to investors. In any event, on any day and during any period over the life of the Trust, total fees and expenses of the Trust may exceed 0.1845% per annum.

Subject to any applicable cap, the Sponsor may charge the Trust a special fee for certain services the Sponsor may provide to the Trust which would otherwise be provided by the Trustee in an amount not to exceed the actual cost of providing such services. The Sponsor or the Trustee from time to time may voluntarily assume some expenses or reimburse the Trust so that total expenses of the Trust are reduced. Neither the Sponsor nor the Trustee is obligated to do so and either one or both parties may discontinue such voluntary assumption of expenses or reimbursement at any time without notice.

The following charges are or may be accrued and paid by the Trust: (a) the Trustee's fee; (b) fees payable to transfer agents for the provision of transfer agency services; (c) fees of the Trustee for extraordinary services performed under the Trust Agreement; (d) various governmental charges; (e) any taxes, fees and charges payable by the Trustee with respect to SPDRs (whether in Creation Units or otherwise); (f) expenses and costs of any action taken by the Trustee or the Sponsor to protect the Trust and the rights and interests of Beneficial Owners of SPDRs (whether in Creation Units or otherwise); (g) indemnification of the Trustee or the Sponsor for any losses, liabilities or expenses incurred by it in the administration of the Trust; (h) expenses incurred in contacting Beneficial Owners of SPDRs during the life of the Trust and upon termination of the Trust; and (i) other out-of-pocket expenses of the Trust incurred pursuant to actions permitted or required under the Trust Agreement.

In addition, the following expenses are or may be charged to the Trust: (a) reimbursement to the Sponsor of amounts paid by it to S&P in respect of annual licensing fees pursuant to the License Agreement; (b) federal and state annual registration fees for the issuance of SPDRs; and (c) expenses of the Sponsor relating to the printing and distribution of marketing materials describing SPDRs and the Trust (including, but not limited to, associated legal, consulting, advertising, and marketing costs and other out-of-pocket expenses such as printing). Pursuant to the provisions of an exemptive order, the expenses set forth in this paragraph may be charged to the Trust by the Trustee in an amount equal to the actual costs incurred, but in no case shall such charges exceed 20/100 of 1% (0.20%) per annum of the daily NAV of the Trust.

If the income received by the Trust in the form of dividends and other distributions on Portfolio Securities is insufficient to cover Trust expenses, the

Trustee may make advances to the Trust to cover such expenses. Otherwise, the Trustee may sell Portfolio Securities in an amount sufficient to pay such expenses. The Trustee may reimburse itself in the amount of any such advance, together with interest thereon at a percentage rate equal to the then current overnight federal funds rate, by deducting such amounts from (a) dividend payments or other income of the Trust when such payments or other income is received, (b) the amounts earned or benefits derived by the Trustee on cash held by the Trustee for the benefit of the Trust, and (c) the sale of Portfolio Securities. Notwithstanding the foregoing, if any advance remains outstanding for more than forty-five (45) Business Days, the Trustee may sell Portfolio Securities to reimburse itself for such advance and any accrued interest thereon. These advances will be secured by a lien on the assets of the Trust in favor of the Trustee. The expenses of the Trust are reflected in the NAV of the Trust.

For services performed under the Trust Agreement, the Trustee is paid a fee at an annual rate of 6/100 of 1% to 10/100 of 1% of the NAV of the Trust, as shown below, such percentage amount to vary depending on the NAV of the Trust, plus or minus the Adjustment Amount. The compensation is computed on each Business Day based on the NAV of the Trust on such day, and the amount thereof is accrued daily and paid monthly. To the extent that the amount of the Trustee's compensation, before any adjustment in respect of the Adjustment Amount, is less than specified amounts, the Sponsor has agreed to pay the amount of any such shortfall. The Trustee also may waive all or a portion of such fee.

Trustee Fee Scale

*	The fee indicated applies to that portion of the NAV of the Trust that falls in the size category indicated.

As of September 30, 2004, and as of December 31, 2004, the NAV of the Trust was $45,715,924,958 and $55,943,721,321, respectively. No representation is made as to the actual NAV of the Trust on any future date, as it is subject to change at any time due to fluctuations in the market value of the Portfolio, or to creations or redemptions made in the future.

The Adjustment Amount is calculated at the end of each quarter and applied against the Trustee's fee for the following quarter. "Adjustment Amount" is an amount which is intended, depending upon the circumstances, either to (a) reduce the Trustee's fee by the amount that the Transaction Fees paid on creation and redemption exceed the costs of those activities, and by the

amount of excess earnings on cash held for the benefit of the Trust ** or (b) increase the Trustee's fee by the amount that the Transaction Fee (plus additional amounts paid in connection with creations or redemptions outside the SPDR Clearing Process), paid on creations or redemptions, falls short of the actual costs of these activities. If in any quarter the Adjustment Amount exceeds the fee payable to the Trustee as set forth above, the Trustee uses such excess amount to reduce other Trust expenses, subject to certain federal tax limitations. To the extent that the amount of such excess exceeds the Trust's expenses for such quarter, any remaining excess is retained by the Trustee as part of its compensation. If in any quarter the costs of processing creations and redemptions exceed the amounts charged as a Transaction Fee (plus the additional amounts paid in connection with creations or redemptions outside the SPDR Clearing Process) net of the excess earnings, if any, on cash held for the benefit of the Trust, the Trustee will augment the Trustee's fee by the resulting Adjustment Amount. The net Adjustment Amount is usually a credit to the Trust. To make the expense ratio of the Trust comparable to the expense ratio of most other investment companies, it is shown as a "below the line" adjustment to Trust's expenses. If the adjustment is negative, it is shown "above the line."

VALUATION

The NAV of the Trust is computed as of the Evaluation Time shown under "Summary—Essential Information" on each Business Day. The NAV of the Trust on a per SPDR basis is determined by subtracting all liabilities (including accrued expenses and dividends payable) from the total value of the Portfolio and other assets and dividing the result by the total number of outstanding SPDRs.

The value of the Portfolio is determined by the Trustee in good faith in the following manner. If Portfolio Securities are listed on one or more national securities exchanges or on the National Market System maintained by the NASDAQ Stock Market, such evaluation is generally based on the closing sale price on that day or, in the case of the NASDAQ, at the official closing price on that day (unless the Trustee deems such price inappropriate as a basis for evaluation) on the exchange or system which is deemed to be the principal market thereof (the New York or American Stock Exchange if the stocks are listed thereon) or, if there is no such appropriate closing price or NASDAQ official closing price on such exchange or system at the last sale price (unless the Trustee deems such price inappropriate as a basis for evaluation). If the stocks are not so listed or, if so listed and the principal market therefor is other than on such exchange or system or there is no such closing price available, such evaluation shall generally be made by the Trustee in good faith based on

**	The excess earnings on cash amount is currently calculated, and applied, on a monthly basis.

the closing price on the over-the-counter market (unless the Trustee deems such price inappropriate as a basis for evaluation) or if there is no such appropriate closing price, (a) on current bid prices, (b) if bid prices are not available, on the basis of current bid prices for comparable stocks, (c) by the Trustee's appraising the value of the stocks in good faith on the bid side of the market, or (d) by any combination thereof.

ADMINISTRATION OF THE TRUST

Distributions to Beneficial Owners

The regular quarterly ex-dividend date for SPDRs is the third Friday in each of March, June, September and December, unless such day is not a Business Day, in which case the ex-dividend date is the immediately preceding Business Day ("Ex-Dividend Date"). Beneficial Owners reflected on the records of DTC and the DTC Participants on the second Business Day following the Ex-Dividend Date ("Record Date") are entitled to receive an amount representing dividends accumulated on Portfolio Securities through the quarterly dividend period which ends on the Business Day preceding such Ex-Dividend Date (including stocks with ex-dividend dates falling within such quarterly dividend period), net of fees and expenses, accrued daily for such period. For the purposes of all dividend distributions, dividends per SPDR are calculated at least to the nearest 1/1000th of $0.01. The payment of dividends is made on the last Business Day in the calendar month following each Ex-Dividend Date ("Dividend Payment Date"). Dividend payments are made through DTC and the DTC Participants to Beneficial Owners then of record with funds received from the Trustee.

Dividends payable to the Trust in respect of Portfolio Securities are credited by the Trustee to a non-interest bearing account as of the date on which the Trust receives such dividends. Other moneys received by the Trustee in respect of the Portfolio, including but not limited to the Cash Component, the Cash Redemption Payment, all moneys realized by the Trustee from the sale of options, warrants or other similar rights received or distributed in respect of Portfolio Securities as dividends or distributions and capital gains resulting from the sale of Portfolio Securities are credited by the Trustee to a non-interest bearing account. All funds collected or received are held by the Trustee without interest until distributed in accordance with the provisions of the Trust Agreement. To the extent the amounts credited to the account generate interest income or an equivalent benefit to the Trustee, such interest income or benefit is used to reduce the Trustee's annual fee.

Any additional distributions the Trust may need to make so as to continue to qualify as a "regulated investment company" would consist of (a) an increase in the distribution scheduled for January to include any amount by which estimated Trust investment company taxable income and net capital

gains for a year exceeds the amount of Trust taxable income previously distributed with respect to such year or, if greater, the minimum amount required to avoid imposition of such excise tax, and (b) a distribution soon after actual annual investment company taxable income and net capital gains of the Trust have been computed, of the amount, if any, by which such actual income exceeds the distributions already made. The NAV of the Trust is reduced in direct proportion to the amount of such additional distributions. The magnitude of the additional distributions, if any, depends upon a number of factors, including the level of redemption activity experienced by the Trust. Because substantially all proceeds from the sale of stocks in connection with adjustments to the Portfolio are used to purchase shares of Index Securities, the Trust may have no cash or insufficient cash with which to pay such additional distributions. In that case, the Trustee has to sell shares of Portfolio Securities sufficient to produce the cash required to make such additional distributions. In selecting the stocks to be sold to produce cash for such distributions, the Trustee chooses among the stocks that are over-weighted in the Portfolio relative to their weightings in the S&P 500 Index first and then from among all other stocks in such a manner to maintain the weightings of Portfolio Securities within the applicable Misweighting Amount.

The Trustee may declare special dividends if such action is necessary or advisable to preserve the status of the Trust as a regulated investment company or to avoid imposition of income or excise taxes on undistributed income, and to vary the frequency with which periodic distributions are made ( e.g. , from quarterly to monthly) if it is determined by the Sponsor and the Trustee that such a variance would be advisable to facilitate compliance with the rules and regulations applicable to regulated investment companies or would otherwise be advantageous to the Trust. In addition, the Trustee may change the regular ex-dividend date for SPDRs to another date within the month or quarter if it is determined by the Sponsor and the Trustee that such a change would be advantageous to the Trust. Notice of any such variance or change shall be provided to Beneficial Owners via DTC and the DTC Participants.

As soon as practicable after notice of termination of the Trust, the Trustee will distribute via DTC and the DTC Participants to each Beneficial Owner redeeming Creation Units before the termination date specified in such notice a portion of Portfolio Securities and cash as described above. Otherwise, the Trustee will distribute to each Beneficial Owner (whether in Creation Unit size aggregations or otherwise), as soon as practicable after termination of the Trust, such Beneficial Owner's pro rata share of the NAV of the Trust.

All distributions are made by the Trustee through DTC and the DTC Participants to Beneficial Owners as recorded on the book entry system of DTC and the DTC Participants.

The settlement date for the creation of SPDRs or the purchase of SPDRs in the secondary market must occur on or before the Record Date in order for

such creator or purchaser to receive a distribution on the next Dividend Payment Date. If the settlement date for such creation or a secondary market purchase occurs after the Record Date, the distribution will be made to the prior securityholder or Beneficial Owner as of such Record Date.

Any Beneficial Owner interested in acquiring additional SPDRs with proceeds received from distributions described above may elect dividend reinvestment through DTC Participants by means of the Service, if such service is available through the Beneficial Owner's broker.

Statements to Beneficial Owners; Annual Reports

With each distribution, the Trustee furnishes for distribution to Beneficial Owners a statement setting forth the amount being distributed, expressed as a dollar amount per SPDR.

Promptly after the end of each fiscal year, the Trustee furnishes to the DTC Participants for distribution to each person who was a Beneficial Owner of SPDRs at the end of such fiscal year, an annual report of the Trust containing financial statements audited by independent accountants of nationally recognized standing and such other information as may be required by applicable laws, rules and regulations.

Rights of Beneficial Owners

Beneficial Owners may sell SPDRs in the secondary market, but must accumulate enough SPDRs to constitute a full Creation Unit in order to redeem through the Trust. The death or incapacity of any Beneficial Owner does not operate to terminate the Trust nor entitle such Beneficial Owner's legal representatives or heirs to claim an accounting or to take any action or proceeding in any court for a partition or winding up of the Trust.

Beneficial Owners shall not (a) have the right to vote concerning the Trust, except with respect to termination and as otherwise expressly set forth in the Trust Agreement, (b) in any manner control the operation and management of the Trust, or (c) be liable to any other person by reason of any action taken by the Sponsor or the Trustee. The Trustee has the right to vote all of the voting stocks in the Trust. The Trustee votes the voting stocks of each issuer in the same proportionate relationship as all other shares of each such issuer are voted to the extent permissible and, if not permitted, abstains from voting.

Amendments to the Trust Agreement

The Trust Agreement may be amended from time to time by the Trustee and the Sponsor without the consent of any Beneficial Owners (a) to cure any ambiguity or to correct or supplement any provision that may be defective or inconsistent or to make such other provisions as will not adversely affect the

interests of Beneficial Owners; (b) to change any provision as may be required by the SEC; (c) to add or change any provision as may be necessary or advisable for the continuing qualification of the Trust as a "regulated investment company" under the Code; (d) to add or change any provision as may be necessary or advisable if NSCC or DTC is unable or unwilling to continue to perform its functions; and (e) to add or change any provision to conform the adjustments to the Portfolio and the Portfolio Deposit to changes, if any, made by S&P in its method of determining the S&P 500 Index. The Trust Agreement may also be amended by the Sponsor and the Trustee with the consent of the Beneficial Owners of 51% of the outstanding SPDRs to add provisions to, or change or eliminate any of the provisions of, the Trust Agreement or to modify the rights of Beneficial Owners; although, the Trust Agreement may not be amended without the consent of the Beneficial Owners of all outstanding SPDRs if such amendment would (a) permit the acquisition of any securities other than those acquired in accordance with the terms and conditions of the Trust Agreement; (b) reduce the interest of any Beneficial Owner in the Trust; or (c) reduce the percentage of Beneficial Owners required to consent to any such amendment.

Promptly after the execution of an amendment, the Trustee receives from DTC, pursuant to the terms of the Depository Agreement, a list of all DTC Participants holding SPDRs. The Trustee inquires of each such DTC Participant as to the number of Beneficial Owners for whom such DTC Participant holds SPDRs, and provides each such DTC Participant with sufficient copies of a written notice of the substance of such amendment for transmittal by each such DTC Participant to Beneficial Owners.

Termination of the Trust Agreement

The Trust Agreement provides that the Sponsor has the discretionary right to direct the Trustee to terminate the Trust if at any time the NAV of the Trust is less than $350,000,000, as such dollar amount shall be adjusted for inflation in accordance with the CPI-U. This adjustment is to take effect at the end of the fourth year following the Initial Date of Deposit and at the end of each year thereafter and to be made so as to reflect the percentage increase in consumer prices as set forth in the CPI-U for the twelve month period ending in the last month of the preceding fiscal year.

The Trust may be terminated (a) by the agreement of the Beneficial Owners of 66 2/3% of outstanding SPDRs; (b) if DTC is unable or unwilling to continue to perform its functions as set forth under the Trust Agreement and a comparable replacement is unavailable; (c) if NSCC no longer provides clearance services with respect to SPDRs, or if the Trustee is no longer a participant in NSCC; (d) if S&P ceases publishing the S&P 500 Index; (e) if the License Agreement is terminated; or (f) if SPDRs are delisted from the Exchange. The Trust will also terminate by its terms on the Termination Date.

The Trust will terminate if either the Sponsor or the Trustee resigns or is removed and a successor is not appointed. The dissolution of the Sponsor or its ceasing to exist as a legal entity for any cause whatsoever, however, will not cause the termination of the Trust Agreement or the Trust unless the Trustee deems termination to be in the best interests of Beneficial Owners.

Prior written notice of the termination of the Trust must be given at least twenty (20) days before termination of the Trust to all Beneficial Owners. The notice must set forth the date on which the Trust will be terminated, the period during which the assets of the Trust will be liquidated, the date on which Beneficial Owners of SPDRs (whether in Creation Unit size aggregations or otherwise) will receive in cash the NAV of the SPDRs held, and the date upon which the books of the Trust shall be closed. The notice shall further state that, as of the date thereof and thereafter, neither requests to create additional Creation Units nor Portfolio Deposits will be accepted, that no additional SPDRs will be created for the purpose of reinvesting dividend distributions, and that, as of the date thereof and thereafter, the portfolio of stocks delivered upon redemption shall be identical in composition and weighting to Portfolio Securities as of such date rather than the stock portion of the Portfolio Deposit as in effect on the date request for redemption is deemed received. Beneficial Owners of Creation Units may, in advance of the Termination Date, redeem in kind directly from the Trust.

Within a reasonable period after the Termination Date, the Trustee shall, subject to any applicable provisions of law, use its best efforts to sell all of the Portfolio Securities not already distributed to redeeming Beneficial Owners of Creation Units. The Trustee shall not be liable for or responsible in any way for depreciation or loss incurred because of any such sale. The Trustee may suspend such sales upon the occurrence of unusual or unforeseen circumstances, including but not limited to a suspension in trading of a stock, the closing or restriction of trading on a stock exchange, the outbreak of hostilities, or the collapse of the economy. The Trustee shall deduct from the proceeds of sale its fees and all other expenses and transmit the remaining amount to DTC for distribution, together with a final statement setting forth the computation of the gross amount distributed. SPDRs not redeemed before termination of the Trust will be redeemed in cash at NAV based on the proceeds of the sale of Portfolio Securities, with no minimum aggregation of SPDRs required.

SPONSOR

The Sponsor is a Delaware limited liability company incorporated on April 6, 1998 with offices c/o the American Stock Exchange, LLC, 86 Trinity Place, New York, New York 10006. The Sponsor's Internal Revenue Service Employer Identification Number is 52-2127241. The Exchange is the sole member of the Sponsor and the Exchange is a "control person" of the Sponsor as such term is defined in the Securities Act of 1933.

The Sponsor, at its own expense, may from time to time provide additional promotional incentives to brokers who sell SPDRs to the public. In certain instances, these incentives may be provided only to those brokers who meet certain threshold requirements for participation in a given incentive program, such as selling a significant number of SPDRs within a specified period.

If at any time the Sponsor fails to undertake or perform or becomes incapable of undertaking or performing any of the duties required under the Trust Agreement, or resigns, or becomes bankrupt or its affairs are taken over by public authorities, the Trustee may appoint a successor Sponsor, agree to act as Sponsor itself, or may terminate the Trust Agreement and liquidate the Trust. Notice of the resignation or removal of the Sponsor and the appointment of a successor shall be mailed by the Trustee to DTC and the DTC Participants for distribution to Beneficial Owners. Upon a successor Sponsor's execution of a written acceptance of appointment as Sponsor of the Trust, the successor Sponsor becomes vested with all of the rights, powers, duties and obligations of the original Sponsor. Any successor Sponsor may be compensated at rates deemed by the Trustee to be reasonable.

The Sponsor may resign by executing and delivering to the Trustee an instrument of resignation. Such resignation shall become effective upon the appointment of a successor Sponsor and the acceptance of appointment by the successor Sponsor, unless the Trustee either agrees to act as Sponsor or terminates the Trust Agreement and liquidates the Trust. The dissolution of the Sponsor or its ceasing to exist as a legal entity for any cause whatsoever will not cause the termination of the Trust Agreement or the Trust unless the Trustee deems termination to be in the best interests of the Beneficial Owners of SPDRs.

The Trust Agreement provides that the Sponsor is not liable to the Trustee, the Trust or to the Beneficial Owners of SPDRs for taking any action, or for refraining from taking any action, made in good faith or for errors in judgment, but is liable only for its own gross negligence, bad faith, willful misconduct or willful malfeasance in the performance of its duties or its reckless disregard of its obligations and duties under the Trust Agreement. The Sponsor is not liable or responsible in any way for depreciation or loss incurred by the Trust because of the sale of any Portfolio Securities. The Trust Agreement further provides that the Sponsor and its directors, subsidiaries, shareholders, officers, employees, and affiliates under common control with the Sponsor shall be indemnified from the assets of the Trust and held harmless against any loss, liability or expense incurred without gross negligence, bad faith, willful misconduct or willful malfeasance on the part of any such party in the performance of its duties or reckless disregard of its obligations and duties under the Trust Agreement, including the payment of the costs and expenses of defending against any claim or liability.

TRUSTEE

The Trustee is a bank and trust company organized under the laws of the Commonwealth of Massachusetts with its principal place of business at 225 Franklin Street, Boston, Massachusetts 02110. The Trustee's Internal Revenue Service Employer Identification Number is 04-1867445. The Trustee is subject to supervision and examination by the Massachusetts Division of Banks and the Federal Reserve Bank of Boston.

Information regarding Cash Redemption Payment amounts, number of outstanding SPDRs and Transaction Fees may be obtained from the Trustee at the toll-free number: 1-800-545-4189. Complete copies of the Trust Agreement and a list of the parties that have executed a Participant Agreement may be obtained from the Trustee's principal office.

The Trustee may resign and be discharged of the Trust created by the Trust Agreement by executing a notice of resignation in writing and filing such notice with the Sponsor and mailing a copy of the notice of resignation to all DTC Participants reflected on the records of DTC as owning SPDRs for distribution to Beneficial Owners as provided above not less than sixty (60) days before the date such resignation is to take effect. Such resignation becomes effective upon the appointment of and the acceptance of the Trust by a successor Trustee. The Sponsor, upon receiving notice of such resignation, is obligated to use its best efforts to appoint a successor Trustee promptly. If no successor is appointed within sixty (60) days after the date such notice of resignation is given, the Trust shall terminate.

If the Trustee becomes incapable of acting as such or is adjudged bankrupt or is taken over by any public authority, the Sponsor may discharge the Trustee and appoint a successor Trustee as provided in the Trust Agreement. The Sponsor shall mail notice of such discharge and appointment via the DTC Participants to Beneficial Owners. Upon a successor Trustee's execution of a written acceptance of an appointment as Trustee for the Trust, the successor Trustee becomes vested with all the rights, powers, duties and obligations of the original Trustee. A successor Trustee must be (a) a trust company, corporation or national banking association organized, doing business under the laws of the United States or any state thereof; (b) authorized under such laws to exercise corporate trust powers; and (c) at all times have an aggregate capital, surplus and undivided profit of not less than $50,000,000.

Beneficial Owners of 51% of the then outstanding SPDRs may at any time remove the Trustee by written instrument(s) delivered to the Trustee and the Sponsor. The Sponsor shall thereupon use its best efforts to appoint a successor Trustee as described above.

The Trust Agreement limits Trustee's liabilities. It provides, among other things, that the Trustee is not liable for (a) any action taken in reasonable reliance on properly executed documents or for the disposition of monies or

stocks or for the evaluations required to be made thereunder, except by reason of its own gross negligence, bad faith, willful malfeasance, willful misconduct, or reckless disregard of its duties and obligations; (b) depreciation or loss incurred by reason of the sale by the Trustee of any Portfolio Securities; (c) any action the Trustee takes where the Sponsor fails to act; and (d) any taxes or other governmental charges imposed upon or in respect of Portfolio Securities or upon the interest thereon or upon it as Trustee or upon or in respect of the Trust which the Trustee may be required to pay under any present or future law of the United States of America or of any other taxing authority having jurisdiction.

The Trustee and its directors, subsidiaries, shareholders, officers, employees, and affiliates under common control with the Trustee will be indemnified from the assets of the Trust and held harmless against any loss, liability or expense incurred without gross negligence, bad faith, willful misconduct, willful malfeasance on the part of such party or reckless disregard of its duties and obligations, arising out of, or in connection with its acceptance or administration of the Trust, including the costs and expenses (including counsel fees) of defending against any claim or liability.

DEPOSITORY

DTC is a limited purpose trust company and member of the Federal Reserve System.

LEGAL OPINION

The legality of the SPDRs offered hereby has been passed upon by Carter Ledyard & Milburn LLP, New York, New York, as counsel for the Sponsor.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The financial statements as of September 30, 2004 included in this Prospectus have been so included in reliance upon the report of PricewaterhouseCoopers LLP, independent registered public accounting firm, 125 High Street, Boston, Massachusetts, given on the authority of said firm as experts in auditing and accounting.

CODE OF ETHICS

The Trust and the Sponsor have adopted a code of ethics regarding personal securities transactions by employees. Subject to certain conditions and standards, the code permits employees to invest in SPDRs for their own accounts. The code is designed to prevent fraud, deception and misconduct against the Trust and to provide reasonable standards of conduct. The code is on file with the SEC and you may obtain a copy by visiting the SEC at the address listed on the back cover of this prospectus. The code is also available on the EDGAR Database on the SEC's Internet site at http://www.sec.gov. A copy may be obtained, after paying a duplicating fee, by electronic request at publicinfo@sec.gov, or by writing the SEC at the address listed on the back cover of this prospectus.

INFORMATION AND COMPARISONS RELATING TO TRUST,
SECONDARY MARKET TRADING, NET ASSET SIZE, PERFORMANCE AND TAX TREATMENT

Information regarding various aspects of the Trust, including the net asset size thereof, as well as the secondary market trading, the performance and the tax treatment of SPDRs, may be included from time to time in advertisements, sales literature and other communications and in reports to current or prospective Beneficial Owners. Any such performance-related information will reflect only past performance of SPDRs, and no guarantees can be made of future results.

Specifically, information may be provided to investors regarding the ability to engage in short sales of SPDRs, including reference to the exemption from the "tick test" provision of the SEC short sale rule (Rule 10a-1 under the Securities Exchange Act of 1934), to permit short sales on "minus" or "zero-minus" ticks. Selling short refers to the sale of securities which the seller does not own, but which the seller arranges to borrow before effecting the sale. Institutional investors may be advised that lending their SPDRs to short sellers may generate stock loan credits that may supplement the return they can earn from an investment in SPDRs. These stock loan credits may provide a useful source of additional income for certain institutional investors who can arrange to lend SPDRs. Potential short sellers may be advised that a short rebate (functionally equivalent to partial use of proceeds of the short sale) may reduce their cost of selling short.

In addition, information may be provided to prospective or current investors comparing and contrasting the tax efficiencies of conventional mutual funds with SPDRs. Both conventional mutual funds and the Trust may be required to recognize capital gains incurred as a result of adjustments to the composition of the S&P 500 Index and therefore to their respective portfolios. From a tax perspective, however, a significant difference between a conventional mutual fund and the Trust is the process by which their shares are redeemed. In cases where a conventional mutual fund experiences redemptions in excess of subscriptions ("net redemptions") and has insufficient cash available to fund such net redemptions, such fund may have to sell stocks held in its portfolio to raise and pay cash to redeeming shareholders. A mutual fund will generally experience a taxable gain or loss when it sells such portfolio stocks in order to pay cash to redeeming fund shareholders. In contrast, the redemption mechanism for SPDRs does not involve selling the portfolio stocks. Instead, the Trust delivers the actual portfolio of stocks in an in-kind exchange to any person redeeming SPDRs shares in Creation Unit size aggregations. While this in-kind exchange is a taxable transaction to the redeeming entity (usually a broker/dealer) making the exchange, it generally does not constitute a taxable transaction at the Trust level and, consequently, there is no realization of taxable gain or loss by the Trust with respect to such in-kind exchanges. In a period of market appreciation of the S&P 500 Index

and, consequently, appreciation of the portfolio stocks held in the Trust, this in-kind redemption mechanism has the effect of eliminating the recognition and distribution of those net unrealized gains at the Trust level. Although the same result would obtain for conventional mutual funds utilizing an in-kind redemption mechanism, the opportunities to redeem fund shares by delivering portfolio stocks in-kind are limited in most mutual funds.

Investors may be informed that, while no unequivocal statement can be made as to the net tax impact on a conventional mutual fund resulting from the purchases and sales of its portfolio stocks over a period of time, conventional funds that have accumulated substantial unrealized capital gains, if they experience net redemptions and do not have sufficient available cash, may be required to make taxable capital gains distributions that are generated by changes in such fund's portfolio. In contrast, the in-kind redemption mechanism of SPDRs may make them more tax efficient investments under most circumstances than comparable conventional mutual fund shares. As discussed above, this in-kind redemption feature tends to lower the amount of annual net capital gains distributions to SPDRs holders as compared to their conventional mutual fund counterparts. Since shareholders are generally required to pay income tax on capital gains distributions, the smaller the amount of such distributions, the less taxes that are payable currently. To the extent that the Trust is not required to recognize capital gains, the SPDRs holder is able, in effect, to defer tax on such gains until he sells or otherwise disposes of his shares, or the Trust terminates. If such holder retains his shares until his death, under current law the tax basis of such shares would be adjusted to their then fair market value.

One important difference between SPDRs and conventional mutual fund shares is that SPDRs are available for purchase or sale on an intraday basis on the American Stock Exchange. An investor who buys shares in a conventional mutual fund will buy or sell shares at a price at or related to the closing NAV per share, as determined by the fund. In contrast, SPDRs are not offered for purchase or redeemed for cash at a fixed relationship to closing NAV. The tables below illustrate the distribution relationship of SPDRs closing prices to NAV for the period 1/29/93 (the first trading date of the SPDR Trust) through 12/31/04, the distribution relationships of high, low and closing prices over the same period, and distribution of bid/ask spreads for 2004. This table should help investors evaluate some of the advantages and disadvantages of SPDRs relative to funds sold and redeemed at prices related to closing NAV. Specifically, the table illustrates in an approximate way the risks of buying or selling SPDRs at prices less favorable than closing NAV and, correspondingly, the opportunities to buy or sell at prices more favorable than closing NAV.

The investor may wish to evaluate the opportunity to buy or sell on an intraday basis versus the assurance of a transaction at or related to closing NAV. To assist investors in making this comparison, the table illustrates the distribution of percentage ranges between the high and the low price each day

and between each extreme daily value and the closing NAV for all trading days from 1/29/93 through 12/31/04. The investor may wish to compare these ranges with the average bid/asked spread on SPDRs and add any commissions charged by a broker. The trading ranges for this period will not necessarily be typical of trading ranges in future years and the bid/asked spread on SPDRs may vary materially over time and may be significantly greater at times in the future. There is some evidence, for example, that the bid/asked spread will widen in markets that are more volatile and narrow when markets are less volatile. Consequently, the investor should expect wider bid/asked spreads to be associated with wider daily spread ranges.

Daily Percentage Price Ranges: Average and Frequency Distribution for
SPDR Trust and S&P Composite Stock Price Index:
Highs and Lows vs. Close*
(from 1/29/93 through 12/31/2004)

S&P 500 COMPOSITE STOCK PRICE INDEX


	Daily % Price Range					Intraday High Value Above Closing Value					Intraday Low Value Below Closing Value
Range	Frequency		% of Total			Frequency		% of Total			Frequency		% of Total
0—0.25%		2		0.07	%		1,196		39.80	%		813		27.05	%
0.25—0.5%		266		8.85	%		561		18.67	%		701		23.33	%
0.5—1%		1,007		33.51	%		634		21.10	%		773		25.72	%
1—1.5%		785		26.12	%		289		9.62	%		360		11.98	%
1.5—2%		465		15.47	%		166		5.52	%		189		6.29	%
2—2.5%		236		7.85	%		85		2.83	%		89		2.96	%
2.5—3%		121		4.03	%		36		1.20	%		34		1.13	%
3—3.5%		57		1.90	%		20		0.67	%		20		0.67	%
>3.5%		66		2.20	%		18		0.60	%		26		0.87	%
Total		3,005		100	%		3,005		100	%		3,005		100	%

Average Daily Range: 1.3229%

SPDR TRUST


	Daily % Price Range					Intraday High Value Above Closing Value					Intraday Low Value Below Closing Value
Range	Frequency		% of Total			Frequency		% of Total			Frequency		% of Total
0—0.25%		21		0.70	%		1,048		34.88	%		761		25.32	%
0.25—0.5%		272		9.05	%		642		21.36	%		735		24.46	%
0.5—1%		866		28.82	%		668		22.23	%		789		26.26	%
1—1.5%		840		27.95	%		325		10.82	%		386		12.85	%
1.5—2%		493		16.41	%		135		4.49	%		170		5.66	%
2—2.5%		254		8.45	%		107		3.56	%		82		2.73	%
2.5—3%		128		4.26	%		43		1.43	%		43		1.43	%
3—3.5%		63		2.10	%		19		0.63	%		20		0.67	%
>3.5%		68		2.26	%		18		0.60	%		19		0.63	%
Total		3,005		100	%		3,005		100	%		3,005		100	%

Average Daily Range: 1.3635%

*	Source: Bloomberg

Frequency Distribution of Discounts and Premiums for SPDR Trust:
Closing AMEX Price vs. Net Asset Value (NAV) as of 12/31/04



Range			Calendar Quarter Ending 3/31/2004			Calendar Quarter Ending 6/30/2004			Calendar Quarter Ending 9/30/2004			Calendar Quarter Ending 12/31/2004			Calendar Year 2004			From 1/29/1993 through 12/31/2004
> 200	Days			—			—			—			—			—			—
Basis Points		%		—			—			—			—			—			—
150—200	Days			—			—			—			—			—			—
Basis Points		%		—			—			—			—			—			—
100—150	Days			—			—			—			—			—			1
Basis Points		%		—			—			—			—			—			0.0	%
50—100	Days			—			1			—			—			1			20
Basis Points		%		—			1.6	%		—			—			0.4	%		0.7	%
25—50	Days			—			1			1			—			2			178
Basis Points		%		—			1.6	%		1.6	%		—			0.8	%		5.9	%
0—25	Days			26			29			30			35			120			1261
Basis Points		%		41.9	%		46.8	%		46.9	%		54.7	%		47.6	%		42.0	%
Total Days	Days			26			31			31			35			123			1460
at Premium		%		41.9	%		50.0	%		48.4	%		54.7	%		48.8	%		48.6	%
Closing Price	Days			3			2			2			1			8			28
Equal to NAV		%		4.8	%		3.2	%		3.1	%		1.6	%		3.2	%		0.9	%
Total Days	Days			33			29			31			28			121			1517
at Discount		%		53.2	%		46.8	%		48.4	%		43.8	%		48.0	%		50.5	%
0— -25	Days			30			27			29			27			113			1222
Basis Points		%		48.4	%		43.5	%		45.3	%		42.2	%		44.8	%		40.7	%
-25— -50	Days			3			2			2			1			8			243
Basis Points		%		4.8	%		3.2	%		3.1	%		1.6	%		3.2	%		8.1	%
-50— -100	Days			—			—			—			—			—			49
Basis Points		%		—			—			—			—			—			1.6	%
-100— -150	Days			—			—			—			—			—			1
Basis Points		%		—			—			—			—			—			0.0	%
-150— -200	Days			—			—			—			—			—			1
Basis Points		%		—			—			—			—			—			0.0	%
<-200	Days			—			—			—			—			—			1
Basis Points		%		—			—			—			—			—			0.0	%

Close was within 0.25% of NAV better than 83% of the time from 1/29/93
(the first day of trading on the AMEX) through 12/31/04.

Source: American Stock Exchange LLC.

SPDR BID/ASK SPREAD DISTRIBUTION (2004 Only)*


Range ($)	% of Total
0.01—0.05		78.34	%
0.06—0.10		19.32	%
0.10—0.15		2.04	%
0.15—0.20		0.22	%
0.20—0.25		0.05	%
0.25—0.50		0.03	%
> 0.50		0.00	%
Total		100.00	%

The price range of shares for 2004 was from $106.60 to $121.65; consequently, $0.10 was from 0.13% to 0.09% of the share price.

*	Source: American Stock Exchange LLC

Frequency Distribution of Discounts and Premiums for the SPDR Trust:
Bid/Ask Price vs. Net Asset Value (NAV) as of 12/31/04



Range			Calendar Quarter Ending 3/31/2004			Calendar Quarter Ending 6/30/2004			Calendar Quarter Ending 9/30/2004			Calendar Quarter Ending 12/31/2004			Calendar Year 2004
>50	Days			—			2			—			—			2
Basis Points		%		—			3.2	%		—			—			0.8	%
25—50	Days			—			2			—			—			2
Basis Points		%		—			3.2	%		—			—			0.8	%
0—25	Days			26			37			31			36			130
Basis Points		%		41.9	%		59.7	%		48.4	%		56.3	%		51.6	%
Total Days	Days			26			41			31			36			134
at Premium		%		41.9	%		66.1	%		48.4	%		56.3	%		53.2	%
Closing Price	Days			3			1			2			2			8
Equal to NAV		%		4.8	%		1.6	%		3.1	%		3.1	%		3.2	%
Total Days	Days			33			20			31			26			110
at Discount		%		53.2	%		32.3	%		48.4	%		40.6	%		43.7	%
0— -25	Days			33			20			31			26			110
Basis Points		%		53.2	%		32.3	%		48.4	%		40.6	%		43.7	%
-25— -50	Days			—			—			—			—			—
Basis Points		%		—			—			—			—			—
< -50	Days			—			—			—			—			—
Basis Points		%		—			—			—			—			—

Source: American Stock Exchange LLC

Comparison of Total Returns Based on NAV and Bid/Ask Price ⁽¹⁾

Cumulative Total Return


	1 Year			5 Year			10 Year
SPDR Trust Series 1
Return Based on NAV		10.76	%		–11.34	%		207.55	%
Return Based on Bid/Ask Price		10.96	%		–11.33	%		209.86	%
S&P 500 Index		10.88	%		–10.98	%		212.98	%

Average Annual Total Return


	1 Year			5 Year			10 Year
SPDR Trust Series 1
Return Based on NAV		10.76	%		–2.38	%		11.89	%
Return Based on Bid/Ask Price		10.96	%		–2.38	%		11.97	%
S&P 500 Index		10.88	%		–2.30	%		12.07	%

(1)	Currently, the Bid/Ask Price is calculated based on the best bid and best offer on the Amex at 4:00 p.m. However, prior to April 3, 2001, the calculation of the Bid/Ask Price was based on the midpoint of the best bid and best offer at the close of trading on the AMEX, ordinarily 4:15 p.m.

GLOSSARY


	Page
"10 Basis Point Limit"		9
"Additional Cash Deposit"		32
"Adjustment Amount"		56
"Adjustment Day"		43
"Balancing Amount"		44
"Beneficial Owners"		34
"Business Day"		3
"Cash Component"		5
"Cash Redemption Payment"		37
"Closing Time"		31
"Code"		10
"Creation Units"		4
"Depository Agreement"		35
"Distributor"		4
"Dividend Equivalent Payment"		5
"Dividend Payment Date"		58
"DTC"		10
"DTCC"		30
"DTC Cut-Off Time"		39
"DTC Participants"		34
"Evaluation Time"		1
"Ex-Dividend Date"		58
"Excess Cash Amounts"		37
"Exchange"		4
"Index Securities"		3
"Indirect Participants"		34
"License Agreement"		i
"Misweighting"		41
"Misweighting Amount"		41
"NAV"		3
"NAV Amount"		43
"NSCC Business Day"		14
"NSCC"		5
"Participant Agreement"		5
"Participating Party"		5
"Portfolio"		3
"Portfolio Deposit"		5
"Portfolio Deposit Amount"		44
"Portfolio Securities"		3
"Record Date"		58
"Request Day"		43
"S&P"		3
"S&P 500 Index"		3
"SEC"		5
"Service"		10
"SPDRs"		3
"SPDR Clearing Process"		5
"Sponsor"		3
"Transaction Fee"		9
"Transmittal Date"		30
"Trust"		3
"Trust Agreement"		3
"Trustee"		3
"Weighting Analysis"		41

STANDARD & POOR'S DEPOSITARY
RECEIPTS (SPDRs)
SPDR TRUST, SERIES 1

SPONSOR:
PDR SERVICES LLC

This Prospectus does not include all of the information with respect to the SPDR Trust set forth in its Registration Statement filed with the SEC in Washington, D.C. under the:

•

Securities Act of 1933 (File No. 33-46080) and

•

Investment Company Act of 1940 (File No. 811-7330).

To obtain copies from the SEC at prescribed rates—
Write:     Public Reference Section of the SEC
450 Fifth Street, N.W., Washington, D.C. 20549-6009
CALL:     1-800-SEC-0330
VISIT:     http://www.sec.gov

No person is authorized to give any information or make any representation about the SPDR Trust not contained in this Prospectus, and you should not rely on any other information. Read and keep both parts of this Prospectus for future reference.

PDR Services LLC has filed a registration statement on Form S-6 and Form N-8B-2 with the SEC covering SPDRs. While this Prospectus is a part of the registration statement on Form S-6, it does not contain all the exhibits filed as part of the registration statement on Form S-6. You should consider reviewing the full text of those exhibits.

Prospectus dated January 28, 2005










                       CONTENTS OF REGISTRATION STATEMENT

     This amendment to the Registration Statement on Form S-6 comprises the
     following papers and documents:

               The facing sheet.

               The cross-reference sheet.

               The prospectus.

               The undertaking to file reports.

               The signatures.

               Written consents of the following persons:

               PricewaterhouseCoopers LLP

               (included in Exhibit 99.C2)

               Carter Ledyard & Milburn LLP

               (included in Exhibit 99.C1)

The following exhibits:






          Ex-99.C1 Opinion of Counsel as to legality of securities being
          registered and consent of Counsel.

          Ex-99.C2 Consent of Independent Registered Public Accounting Firm.

          Ex-99.A1 Form of Amendment to Amended and Restated Standard Terms and
          Conditions of Trust dated as of January 1, 2004, between PDR Services
          LLC, as Depositor and State Street Bank and Trust Company, as Trustee
          (which Amended and Restated Standard Terms and Conditions of Trust are
          incorporated herein by reference to EX.99A1 filed on January 27,
          2004).




          Ex-99.A11 Form Code of Ethics

          Ex-99.A41 Form Amendment to Distribution Agreement.








                          FINANCIAL STATEMENTS

         1. Statement of Financial Condition of the Trust as shown in the
current Prospectus for this series herewith.

         2. Financial Statements of the Depositor:




         PDR Services LLC - Financial Statements, as part of American Stock
         Exchange LLC current consolidated financial statements incorporated by
         reference to the Amendment to Form 1-A dated June, 2004.















                                   SIGNATURES




         Pursuant to the requirements of the Securities Act of 1933, the
registrant, SPDR Trust Series 1, certifies that it meets all of the requirements
for effectiveness of this Post Effective Amendment to the Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this Post Effective Amendment to the Registration Statement to be signed on its
behalf by the undersigned thereunto duly authorized, in the City of New York,
and State of New York, on the 28th day of January, 2005.






                                           SPDR TRUST SERIES 1 (Registrant)

                                       By: PDR Services LLC
                                       By: American Stock Exchange LLC,
                                               sole member


                                           /s/ Clifford J. Weber
                                           -------------------------------
                                           Senior Vice President

          Pursuant to the requirements of the Securities Act of 1933, this
Post Effective Amendment to the Registration Statement has been signed below on
behalf of PDR Services LLC, the Depositor, by the following persons in the
capacities and on the date indicated.




PDR SERVICES LLC

Name                                       Title/Office
----                                       ------------




/s/ Clifford J. Weber            Senior Vice President of PDR Services LLC*
-------------------------
Clifford J. Weber



/s/ Robert S. Tull               Vice President of PDR Services LLC
-------------------------
Robert S. Tull




----------
*    The Senior Vice President of PDR Services LLC also undertakes all the
     duties and responsibilities of, and performs all functions of, the
     principal financial officer of PDR Services LLC.











                                  EXHIBIT INDEX






1. EX-99.C1    -- Opinion of Counsel as to legality of securities being
               registered and Consent of Counsel.

2. EX-99.C2    -- Consent of Independent Registered Public Accounting Firm.

3. EX-99.A1    -- Form of Amendment to Amended and Restated Standard Terms and
                  Conditions of Trust dated as of January 1, 2004, between PDR
                  Services LLC, as Depositor and State Street Bank and Trust
                  Company, as Trustee (which Amended and Restated Standard Terms
                  and Conditions of Trust are incorporated herein by reference
                  to EX.99A1 filed on January 27, 2004).

4. EX-99.A11   -- Form Code of Ethics.

5. EX-99.A41   -- Form Amendment to Distribution Agreement.




                                                                   Exhibit 99.C1


                                                         January 28, 2005

PDR Services LLC
c/o American Stock Exchange LLC
86 Trinity Place
New York, New York 10006

State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110

     Re: SPDR Trust Series 1
         -------------------

Ladies and Gentlemen:

We have served as counsel to the American Stock Exchange LLC (the "Exchange")
and PDR Services LLC as sponsor (the "Sponsor") of SPDR Trust Series 1
(hereinafter referred to as the "Trust"). It is proposed that Post-Effective
Amendment No. 15 to the Trust's registration statement ("Post-Effective
Amendment No. 15") will be filed with the Securities and Exchange Commission
(the "Commission") and dated as of the date hereof in connection with the
continued issuance by the Trust of an indefinite number of units of fractional
undivided interest in the Trust (hereinafter referred to as the "units")
pursuant to Rule 24f-2 promulgated under the provisions of the Investment
Company Act of 1940, as amended.

     We have examined originals and copies, certified or otherwise identified to
our satisfaction, of all such agreements, certificates and other statements of
corporate officers and other representatives of the Sponsor and other documents
as we have deemed necessary as a basis for this opinion. In such examination, we
have assumed the following: (i) the authenticity of original documents and the
genuineness of all signatures; (ii) the conformity to the originals of all
documents submitted to us as copies; and (iii) the truth, accuracy and
completeness of the information, representations and warranties contained in the
records, documents, instruments and certificates we have reviewed.

     We have, when relevant facts material to our opinion were not independently
established by us, relied to the extent we deemed such reliance proper upon
written or oral statements of officers and other representatives of the Sponsor.
We have not made or undertaken to make any independent investigation to
establish or verify the accuracy or completeness of such factual
representations, certifications and other information.

     We express no opinion as to matters of law in jurisdictions other than the
State of New York and the United States.



     Except as otherwise expressly set forth in this letter, our opinions are
based solely upon the law and the facts as they exist on the date hereof and we
undertake no, and disclaim any, obligation to advise you of any subsequent
change in law or facts or circumstances which might affect any matter or opinion
set forth herein.

     Based on the foregoing and subject to the qualifications set forth in this
letter, we are of the opinion that the Units, when issued by the Trustee in
accordance with the terms of the Indenture and Agreement, including the receipt
by the Trustee of the consideration required for the issuance of the Units, will
be duly and legally issued and will be fully paid and non-assessable.

     This opinion letter is furnished by us, as counsel for the Sponsor, solely
for your benefit in connection with the formation of the Trust and the issuance
of the Units and may not be used for any other purpose or relied upon by any
other person other than you, without our prior written consent.

We hereby represent that Post-Effective Amendment No. 15 contains no disclosure
which would render it ineligible to become effective immediately upon filing
pursuant to paragraph (b) of Rule 485 of the Commission.

We hereby consent to the filing of this opinion as an exhibit to Post-Effective
Amendment No. 15 and to the use of our name where it appears in Post-Effective
Amendment No. 15 and the Prospectus.

                                            Very truly yours,

                                            /s/ Carter Ledyard and Milburn LLP

                                            Carter Ledyard and Milburn LLP





                                                                   EXHIBIT 99.C2

            CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

     We hereby consent to the use in the Prospectus constituting part of this
Post Effective Amendment No. 15 to the registration statement on Form S-6 of our
report dated November 19, 2004, relating to the financial statements and
financial highlights of SPDR Trust, Series 1, which appears in such Prospectus.
We also consent to the reference to us under the heading "Independent Registered
Public Accounting Firm" in such Prospectus.

PricewaterhouseCoopers LLP
Boston, Massachusetts

January 27, 2005





                                 AMENDMENT NO. 1
                                       TO
                              AMENDED AND RESTATED
                     STANDARD TERMS AND CONDITIONS OF TRUST
                          DATED AS OF JANUAURY 1, 2004
                                       AND
                           EFFECTIVE JANUARY 27, 2004

                                       FOR

                                STANDARD & POOR'S
                       DEPOSITARY RECEIPTS ("SPDR") TRUST
                                    SERIES 1
                                       AND
                           ANY SUBSEQUENT AND SIMILAR
                                  SERIES OF THE
                                   SPDR TRUST

                                     BETWEEN

                                PDR SERVICES LLC
                                   AS SPONSOR

                                       AND

                       STATE STREET BANK AND TRUST COMPANY
                                   AS TRUSTEE

                        DATED AS OF NOVEMBER 1, 2004 AND

                        EFFECTIVE AS OF NOVEMBER 8, 2004


THIS AMENDMENT (THE "AMENDMENT AGREEMENT") DATED AS OF NOVEMBER 1, 2004 BETWEEN
PDR SERVICES LLC, AS SPONSOR (THE "SPONSOR"), AND STATE STREET BANK AND TRUST
COMPANY, AS TRUSTEE (THE "TRUSTEE"), AMENDS THE DOCUMENT ENTITLED "AMENDED AND
RESTATED STANDARD TERMS AND CONDITIONS OF TRUST DATED AS OF JANUARY 1, 2004 AND
EFFECTIVE JANUARY 27, 2004 FOR STANDARD & POOR'S DEPOSITARY RECEIPTS ("SPDR")
TRUST SERIES 1 AND ANY SUBSEQUENT AND SIMILAR SERIES OF THE SPDR TRUST BETWEEN
PDR SERVICES LLC AS SPONSOR AND STATE STREET BANK AND TRUST COMPANY AS TRUSTEE"
(HEREINAFTER REFERRED TO AS THE "STANDARD TERMS").





                  WITNESSETH THAT:

                  WHEREAS, the parties hereto have entered into the Standard
Terms to facilitate the creation of the Standard & Poor's Depositary Receipts
("SPDR") Trust (the "Trust"); and

                  WHEREAS, the parties hereto desire to amend the Standard Terms
as more fully set forth below;

                  NOW THEREFORE, in consideration of the premises and of the
mutual agreements contained herein, the Sponsor and the Trustee agree as
follows:

1. The twelfth (12th) paragraph of Section 3.04 of the Standard Terms which
states:

                  "The Trustee further reserves the right to declare special
         dividends if, in its reasonable discretion, such action is necessary or
         advisable to preserve the status of the Trust as a regulated investment
         company or to avoid imposition of income or excise taxes on
         undistributed income."

shall be amended by adding the phrase "or would be otherwise advantageous to the
Beneficial Owners" to the end of the paragraph, so that the entirety of the
paragraph shall now read as follows:

                  "The Trustee further reserves the right to declare special
         dividends if, in its reasonable discretion, such action is necessary or
         advisable to preserve the status of the Trust as a regulated investment
         company or to avoid imposition of income or excise taxes on
         undistributed income or would be otherwise advantageous to the
         Beneficial Owners."

2. Pursuant to Section 10.01 of the Standard Terms, both parties to this
Amendment Agreement hereby agree that paragraph (1) of this Amendment Agreement
is made in made in regard to matters as will not adversely affect the interests
of Beneficial Owners in compliance with the provisions of Section 10.01(a)
thereof.




3. Pursuant to Section 10.01 of the Standard Terms, the Trustee agrees that it
shall promptly furnish each DTC Participant with sufficient copies of a written
notice of the substance of the terms of this Amendment Agreement for transmittal
by each such DTC Participant to the Beneficial Owners of the Trust.

4. Except as amended hereby, the Standard Terms now in effect is in all respects
ratified and confirmed hereby and this Amendment Agreement and all of its
provisions shall be deemed to be a part of the Standard Terms.

5. This Amendment Agreement may be simultaneously executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.

                 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]






IN WITNESS WHEREOF, the parties hereto have caused this Amendment Agreement to
be duly executed as of the date hereof.

                                         PDR SERVICES LLC, as Sponsor



                                         By: ___________________________
                                             Name:
                                             Title: President


ATTEST: _________________
TITLE:





                                         STATE STREET BANK AND TRUST COMPANY,
                                         as Trustee



                                         By: ___________________________
                                             Name:
                                             Title: Senior Vice President




ATTEST: _________________
TITLE:






STATE OF NEW YORK   )
                    : ss.:
COUNTY OF NEW YORK  )


                  On the ___ day of November in the year 2004 before me
personally came to me known, who, being by me duly sworn, did depose and say
that he is the President of PDR Services LLC, the limited liability company
described in and which executed the above instrument; and that he signed his
name thereto by like authority.



                                              --------------------------


                                                     Notary Public






COMMONWEALTH OF MASSACHUSETTS  )
                               : ss.:
COUNTY OF NORFOLK              )


                  On this ___ day of November in the year 2004 before me
personally appeared to me known, who, being by me duly sworn, did depose and say
that he is Senior Vice President of State Street Bank and Trust Company, the
bank and trust company described in and which executed the above instrument; and
that he signed his name thereto by authority of the board of directors of said
bank and trust company.



                                              --------------------------
                                                      Notary Public


                            Effective January 1, 2005

                              PDR SERVICES LLC and

                              SPDR TRUST, SERIES 1

                           MIDCAP SPDR TRUST, SERIES 1

                            DIAMONDS TRUST, SERIES 1

                                 CODE OF CONDUCT

     This Code of Conduct ("Code") is the code of ethics required under Rule
17j-1 of the Investment Company Act of 1940 ("1940 Act") for SPDR Trust, Series
1, Midcap SPDR Trust, Series 1, and DIAMONDS Trust, Series (collectively,
"Trusts") and their Sponsor, PDR Services LLC Rule 17j-1 requires investment
companies and certain of their affiliates to establish codes of ethics minimum
standards of conduct for their employees in connection with the employees'
personal securities transactions.

     The Trusts do not have any employees. All actions necessary for the
day-to-day operation of the Trusts are handled through their Trustees, and
through the Trusts' distributor, Alps Distributors, Inc. ("Distributor"). The
Trustee and Distributor are not affiliated with the Trusts or the Sponsor.
Further, the Sponsor has no direct involvement with the creation, purchase or
redemption of the Trusts' units of beneficial interest. Orders for purchases and
redemptions are initiated only by independent various market participants
through "in kind" deposit and receipt of the Trusts' underlying securities, and
the process for such orders is completely separate from the Sponsor.

     The Sponsor shares its employees with its affiliate, the American Stock
Exchange ("Amex") and as such is subject to the American Stock Exchange Code of
Conduct ("Amex Code"). The Amex Code imposes strict requirements on all Amex
employees, including those of the Sponsor, with respect to their conduct and
personal securities' transactions, including any transactions in the same
securities held by the Trusts. Trading restrictions and reporting requirements
are imposed on all employees, investments in initial public offerings are
prohibited, and employees must annually certify their compliance with the Amex
Code. The Amex Code's provisions adequately protect the interest of the Trust's
unitholders as required under Rule 17j-1 and the 1940 Act, and accordingly, the
Amex Code is incorporated within this Code and attached hereto.





                        I. INTRODUCTION AND APPLICABILITY

Amex (R) is a self-regulatory organization for the securities industry and
securities market operators. We expect Amex members to adhere to a code of
ethics and conduct in order to bring about a high level of investor confidence
in the securities industry. When Amex members fail to follow ethical standards
and violate industry rules, we take appropriate disciplinary action. Given our
company role as a self-regulatory organization and market operator, our
employees must conduct themselves in a manner that commands the respect and
confidence of both the securities industry and the public. Our employees cannot
merely refrain from improper activity; they must also be careful to avoid
situations that could create even an appearance that their actions are not fully
objective. To help ensure that our integrity, credibility, and reputation for
fair dealing are not compromised, we have adopted this Code of Conduct to
provide guidance to employees and to set standards for employee conduct.

The Code of Conduct describes ethical standards to be observed by all Amex
employees. Although many areas of activity are treated specifically, the Code of
Conduct does not, and indeed cannot, cover all of the possible or probable
situations that may arise. A short rule that can be applied when dealing with
any questionable situation is: "WHEN IN DOUBT, DON'T." When employees are
confronted with a situation that is not addressed specifically in the Code of
Conduct, the Amex Code of Conduct Administrator in the Office of General Counsel
should be contacted to determine what effect the Code of Conduct may have on the
situation.

The Code of Conduct applies to all employees of Amex and its subsidiary or
affiliated companies. Amex employees must comply with the provisions of the Code
of Conduct.

The Code of Conduct imposes standards that supplement - not supplant -
applicable legal requirements (e.g., federal and state laws governing such areas
as securities, copyright, and antitrust). In addition, some employees are
required to comply with the ethical codes applicable to their professions (e.g.,
accountants, attorneys).

The Code of Conduct supersedes all previous guidelines and policies that may
have been issued by Amex in the past, and any documents that may have been
issued by various departments to support or interpret such guidelines or
policies. Department-level management is prohibited from issuing any documents
to support, supplement, or interpret the Code of Conduct.

The text of the Code of Conduct is written in the masculine gender to facilitate
reading and understanding. Any reference to "he," "him," or "his" shall also
mean "she," "her," or "hers," as appropriate. All references herein to Amex
include Amex and all current and future subsidiary or affiliated companies. All
references herein to "employees" encompass all full-time and temporary employees
and officers including those of its subsidiary and affiliated companies.

A complete list of definitions used in the Code of Conduct appears in Section
XII.

LISTED BELOW IS AN INTERPRETATION RELATING TO THE ABOVE SECTION.


                            SECTION I INTERPRETATION

1.   QUESTION: Are Amex employees subject to the SEC-approved Amex policy
     prohibiting harassment, intimidation, "refusals to deal," and retaliation?

     ANSWER: Yes, this policy is an example of a legal standard that is external
     to the Code but which is binding on Amex employees. The policy, which was
     filed with the SEC pursuant to Exchange Act Rule 19b-4, provides that:

             Employees, officers, directors and other officials and
             agents of the Amex must not engage, directly or indirectly,
             in any conduct that threatens, harasses, intimidates,
             constitutes a "refusal to deal" or retaliates against any
             member, employee of a member or any other market participant
             because (1) such member, employee or market participant has
             made a proposal to any exchange or market to list or trade
             any option class; (2) of such member's employee's or market
             participant's advocacy or proposals concerning the listing
             or trading of an option class on any exchange or other
             market; (3) such member, employee or market participant
             commenced making a market in or trading any option class on
             any exchange or other market; (4) such member, employee or
             market participant seeks to increase the capacity of an
             options exchange or the options industry to disseminate
             quote or trade data; (5) such member, employee or market
             participant seeks to introduce new option products; or (6)
             such member, employee or market participant seeks to act
             competitively.

                     II. COMPLIANCE WITH THE CODE OF CONDUCT

All employees must become familiar with, and abide by, the Code of Conduct and
the interpretations and procedures issued thereunder. Failure to comply with one
or more of the provisions in the Code of Conduct may result in disciplinary
action against the employee, up to and including immediate termination of
employment. Disciplinary actions taken for violations of the Code of Conduct are
not subject to the Corrective Action Policy contained in the Amex Employee
Handbook.

When hired, each employee must certify, as a condition of employment, that he
has received, read, understands, and agrees to comply with the Code of Conduct.
Once every year, each employee must certify, as a condition of continued
employment, that he has complied with the Code of Conduct since the date of his
previous certification, and that he understands and agrees to continue complying
with the Code of Conduct until the date of his next certification. Failure to
provide a timely initial or annual certification constitutes a violation of the
Code of Conduct and can result in disciplinary action.

Certification is performed as specified in the "Amex Code of Conduct General
Procedures."






                            SECTION II INTERPRETATION

     LISTED BELOW ARE INTERPRETATIONS AND PROCEDURES RELATING TO THE ABOVE
SECTION.

1.   QUESTION: A is working for Amex pursuant to a consulting agreement. Is he
     bound by the Code of Conduct?

     ANSWER: No, the Code of Conduct only applies to employees of Amex. A is not
     an Amex employee.

2.   QUESTION: B, who is employed by XYZ Temporary Services, Inc., has been
     working as a temporary in Department X for six weeks. Is he bound by the
     Code of Conduct?

     ANSWER: No. B is employed by XYZ Temporary Services, Inc., not Amex.



                          SECTION II GENERAL PROCEDURES

CERTIFICATION OF COMPLIANCE

An Amex Code of Conduct Certification Entry Form may be completed on-line by
clicking on the Code of Conduct Certification Entry Form available at Amex
Central.

New Employees:

The Human Resources Department will include a printed copy of the Amex Code of
Conduct with the pre-employment materials provided to each prospective employee
at the time a formal offer of employment is made. Once hired, an employee is
expected to attend the Amex orientation program for new employees, which
includes an overview of Code of Conduct requirements. An employee should discuss
any actual or potential conflicts of interest and any questions regarding the
applicability of the Code of Conduct with his Department Director (or next
higher level officer) during his first week of employment.

Within 30 days of hire, each new employee must certify that he has read,
understood, and agrees to comply with the Code of Conduct. Certification is
performed on-line, via Amex Central. Amex Office of General Counsel monitors
certifications to ensure that all employees complete required certifications in
a timely manner. Delinquent employees will be reported to their Department Heads
for possible disciplinary action.

Current Employees:

Each employee is responsible for being familiar and complying with the Amex Code
of Conduct, as amended from time to time. Employees should review the Code of
Conduct at least annually. Periodically, Amex will require active employees t
attend a training session on the Code of Conduct. Each employee is also
responsible for ensuring that he certifies compliance with the Code of Conduct
once each year, during the period specified by Amex Office of General Counsel.

Before the start of each annual certification season, Amex Office of General
Counsel will remind employees of the need to complete their annual certification
by the applicable deadline. Amex Office of General Counsel will issue its
reminder by way of Amex Central, broadcast e-mail, or similar means. An
employee's failure to receive or read a reminder notice does not relieve an
employee of his responsibility to submit a timely annual certification.


Amex Office of General Counsel monitors certifications to ensure that all
employees complete required certifications in a timely manner. Delinquent
employees will be reported to their Department Heads for possible disciplinary
action.

                        SECTION II SUPERVISORY PROCEDURES

Compliance with the Code of Conduct

The Human Resources Department will include a printed copy of the Amex Code of
Conduct with the pre-employment materials provided to each prospective employee
at the time a formal offer of employment is made. When negotiating employment
terms with prospective employees, the Department Director (or next higher level
officer) should ensure that the prospective employee understands that accepting
employment with Amex may, among other things, require changes in the investments
held by the prospective employee, members of his family, and accounts in which
the prospective employee has an interest or controls trading.

Once hired, a new employee is expected to attend the Amex orientation program
for new employees, which includes an overview of Code of Conduct requirements.
Department Directors (or next higher level officer) should discuss with new
employees anything that is specific to the employee or department that may
present an actual or potential conflict of interest and should answer any
questions regarding the applicability of the Code of Conduct.

Each Department Director (or next higher level officer) is strongly encouraged
to periodically review the requirements of the Amex Code of Conduct during
regularly scheduled staff meetings. Because the annual certification is
typically performed in March of each year, February is an especially useful time
to discuss the Code of Conduct requirements and to remind employees of the need
to recertify their compliance with the Code.

Each Department Director (or next higher level officer) is able to determine on
an on-going basis the extent to which employees within his department have
complied with the above requirements. This information will be available to
Department Directors (or next higher level officers) on-line, via Amex Central,
in the Code of Conduct Certification Response Report. From time to time, Amex
Office of General Counsel will remind Department Directors of the need to
generate and review such reports. In cases of non-compliance, the Department
Director (or next higher level officer) is required to follow up with the
employee to determine the reason(s) for non-compliance, to report this
information in writing to Amex Office of General Counsel, and to ensure that the
employee complies.

                              III. WAIVER REQUESTS

If an employee believes that compliance with a specific provision of the Code of
Conduct will result in an undue hardship in his circumstances, the employee may
seek a waiver from his Executive Vice President.

All waiver requests must be in writing and approved in writing by an Executive
Vice President (or the Amex General Counsel if the waiver request is made by an
employee who is an Executive Vice President or higher). Waivers may be granted
only if the application of a specific provision of the Code of Conduct will, in
fact, result in an undue hardship to the employee seeking the waiver. In
determining whether an undue hardship exists, the Executive Vice President will
consider whether: 1) compliance with the Code of Conduct is contrary to the best
business interests of Amex; and/or 2) the burden on the employee and Amex of
complying with



the Code of Conduct outweighs the business needs of the Amex. A written response
to the waiver request must be provided and must clearly state whether the waiver
is denied, granted as requested, or granted with modifications or restrictions.
If a waiver is granted, the response must detail the nature of the undue
hardship present and reference specific sections of the Code of Conduct, as
applicable. If the waiver is granted subject to any restrictions or conditions,
the response must detail the restrictions or conditions. If an Executive Vice
President determines that a waiver should be denied, the response must provide
the reason(s) and refer to the specific Code sections, as applicable.

LISTED BELOW ARE PROCEDURES RELATING TO THE ABOVE SECTION

                       SECTION III SUPERVISORY PROCEDURES

All waiver requests must be in writing and approved by an Executive Vice
President (or the General Counsel of Amex if the waiver request is made by an
employee who is an Executive Vice President or higher). The Executive Vice
President must ensure the request contains all necessary information, and should
make any inquiries deemed necessary to fully evaluate the request. Waiver
requests should be granted only if the application of a specific provision of
the Amex Code of Conduct will, in fact, result in an undue hardship to the
employee making the waiver request. In determining whether an undue hardship
exists, the Executive Vice President must consider whether: (1) compliance with
the Code of Conduct is contrary to the best business interests of Amex; and/or
(2) the burden on the employee and Amex to comply with the Code of Conduct
outweighs the business needs of Amex. The General Counsel of Amex should be
consulted by the Executive Vice President if he has any questions regarding
whether a request should be granted or to determine whether any precedent exists
for the type of request being made. For waiver requests made by an employee who
is an Executive Vice President or higher, the Amex General Counsel may review
the request with the Office of the Chairman or the Audit Committee prior to
acting on the request.

Absent extenuating circumstances, a written response to the request must be
provided within two weeks of receiving the request. The response must clearly
state whether the waiver is being denied, granted as requested, or granted with
modifications or restrictions. If granted, the response must detail the nature
of the undue hardship present and reference specific sections of the Code of
Conduct, as applicable. If the waiver is granted subject to any restrictions or
conditions, the response must detail them. If an Executive Vice President
determines that a waiver should be denied, the response must provide the
reason(s) and refer to the specific Code sections, as applicable.

Copies of the Executive Vice President's response to a waiver request (whether
granting or denying the request) must be sent to the employee, the Human
Resources Department (to be filed in the employee's personnel file), the
employee's Department Director, and Amex Office of General Counsel.






                            IV. CONFLICTS OF INTEREST

A.   General Provision

All employees should act in the best interests of Amex and refrain from any
conduct that would be detrimental to the interests or the reputation of Amex.
Employees should ensure they do not act on behalf of Amex in situations where
there exists a personal, financial, or other conflict of interest. The following
guidance is provided to assist employees in achieving this end.

B.   Disclosure of Actual and Potential Conflicts

     1.   Employees must avoid acting in a manner that may be interpreted by
          others as having been influenced by personal relationships or for
          personal gain, and must avoid situations that appear improper or
          diminish Amex's reputation. To help ensure these situations are
          avoided, every employee must disclose in writing to his Department
          Director (or next higher level officer) all situations and
          relationships that could be perceived as raising an actual or
          potential conflict of interest.

     2.   If the Department Director (or next higher level officer) determines
          that an actual conflict of interest exists, the employee cannot be
          assigned to work on Amex matters involving the person or entity with
          which the employee has the conflict. If the Department Director (or
          next higher level officer) determines that a potential conflict of
          interest exists, the employee may not be involved in any matter
          related to the area of potential conflict without prior written
          approval from his Executive Vice President.

     3.   An employee who personally becomes the subject of an inquiry,
          investigation, legal proceeding, or any other matter that may affect
          Amex's interests must immediately disclose this fact to his Department
          Director (or next higher level officer). For purposes of the Code of
          Conduct, Amex is presumed to be affected by any occurrence that would
          require disclosure on a Form U-4 or U-5, if an employee were employed
          by a broker/dealer.

Detailed procedures for reporting and addressing actual and potential conflicts
of interest are contained in the "Amex Code of Conduct General Procedures." In
addition, examples of conflicts of interest are discussed in the "Amex Code of
Conduct Interpretations."

C.   Specific Prohibitions

     Employees are specifically prohibited from:

     1.   Engaging in any unlawful or dishonest acts in an attempt to promote
          the interests of Amex.

     2.   Engaging in any unlawful, dishonest or other conduct prejudicial to
          the interests of Amex.

     3.   Engaging directly or indirectly in any personal business transaction
          or private arrangement that accrues from or is based on:

          a.   The employee's position or authority with Amex; or



          b.   Confidential or other information that is not generally available
               to the public or that the employee gains by reason of his
               position or authority with Amex.

     4.   Acting in any manner in respect to the business of Amex, whether or
          not specifically prohibited, that might result in:

          a.   Impeding the expeditious processing of Amex actions;

          b.   Losing independence, impartiality, or objectivity; or

          c.   Affecting adversely the confidence of members of the public in
               the integrity or credibility of Amex or its procedures and
               actions.

          d.   Evasion of Amex accounting policies or controls.

     5.   Absent prior written disclosure and approval from his Executive Vice
          President, an employee also is prohibited from:

          a.   Acting in any Amex matter with anyone with whom the employee has
               a current or past personal, business, or financial interest. This
               includes but is not limited to anyone who is a prospective or
               current issuer, vendor, Amex member, arbitrator, or subscriber.

          b.   Engaging directly or indirectly in any personal, business, or
               financial transaction with an Amex member, including any such
               transaction that may have been initiated prior to starting
               employment with Amex. This prohibition does not apply to
               securities transactions effected with an Amex member in the
               normal course of business and reported as required by Section
               VIII of the Code of Conduct.

D.   The potential for a conflict of interest, if not an actual conflict of
     interest, will be presumed to exist whenever a member of an employee's
     immediate family:

     1.   Is employed by a broker/dealer, any exchange other than that which
          employs the employee, alternative trading system, electronic
          communications network, registered futures association not operated by
          Amex, regulatory client of Amex, mutual fund, or investment adviser.

     2.   Is employed by a bank or insurance company in a capacity related to
          the securities industry.

     3.   Is employed in a capacity directly or indirectly related to the
          issuance, sale, or purchase of securities by an Amex member.

     4.   Is an owner, co-owner, officer, partner, or director of any entity
          which, to the best of the employee's knowledge, is seeking to sell
          goods or services to Amex.

     5.   Has (or within the past three years has had) a professional, personal,
          or financial relationship to any matter to which the employee is to be
          assigned or otherwise may be asked to work.

LISTED BELOW ARE INTERPRETATIONS AND PROCEDURES FOR THE ABOVE SECTION.





                           SECTION IV INTERPRETATIONS

1.   QUESTION: Employee A is an examiner who is negotiating for employment with
     Amex member XYZ. He has been assigned to work on an examination of XYZ.
     What does the Code require in these circumstances?

     ANSWER: A must disclose in writing to his Department Director that he is
     negotiating for employment with XYZ. Because working on the XYZ examination
     presents an actual conflict of interest, A may not participate in the
     examination. Another examiner must be assigned to the XYZ examination.

2.   QUESTION: Employee B is an Enforcement attorney who negotiated for
     employment with the law firm that represents a respondent in a disciplinary
     proceeding to which B has been assigned. The negotiations ended amicably
     six months ago, and there is no prospect that they will be reopened in the
     future. B is confident that his past discussions with the law firm would
     not impair his ability to represent Amex's interests in the disciplinary
     proceeding. What does the Code require in these circumstances?

     ANSWER: B should disclose his prior employment discussions to his
     Department Director. However, given the circumstances, B's participation in
     the disciplinary case would not present an actual or potential conflict of
     interest and the Code of Conduct does not require his recusal. Nonetheless,
     the Department Director may, as a discretionary matter, determine that it
     would be preferable for another attorney to handle the disciplinary case.

3.   QUESTION: Examiner A's brother works in the California branch office of
     Amex member X. Examiner A's Supervisor wants to assign him to conduct an
     examination of Amex member X's Florida branch office. How should this be
     addressed under the Code of Conduct?

     ANSWER: A must disclose the conflict in writing and cannot perform any work
     on matters involving member X without prior written approval from his
     Executive Vice President.

     Generally speaking, it would be preferable if another examiner were
     assigned to the member X branch examination. However, if the Supervisor and
     Department Director believe that assigning Examiner A is in Amex's best
     interests, the Department Director should request his Executive Vice
     President to authorize the assignment in writing. If there is no
     supervisory relationship between member X's Florida and California
     branches, and if Examiner A will not be in a position to review his
     brother's work or his brother's supervisors, and if Examiner A's brother is
     not involved in a dispute with his employer, it may be acceptable to assign
     Examiner A to the examination. If so, Examiner A's Supervisor should be
     vigilant in his review of Examiner A's work product to ensure Examiner A
     did not overlook any potential violations at member X and that any
     potential circumstances noted by Examiner A are fully supported and
     documented in the examination work papers.

4.   QUESTION: Employee A normally participates in the process for accepting and
     evaluating competing bids for computer hardware purchases. Employee A's
     sister works in vendor X's manufacturing plant in New Mexico. Employee A's
     Supervisor wants to assign him to solicit bids for a contract, anticipated
     to be worth around $200,000, for the purchase of 100 personal computers.
     Vendor X is on the list of companies from which bids are to be solicited.
     Vendor X is a multinational corporation with over $1 billion in annual
     sales. How should this be addressed under the Code of Conduct?

     ANSWER: The best course of action is to assign someone other than Employee
     A to negotiate with vendor X. If the Supervisor and Department Director
     believe the assignment is in Amex's best interests, the Department Director
     should request his Executive Vice President to authorize the assignment in
     writing. If Employee A's sister is outside of Vendor X's contracting
     process and cannot affect the contract bid, then it may be appropriate for
     Employee A's Executive Vice President to approve this assignment. Another
     factor impacting this decision is that the anticipated contract size is



     small in relation to vendor X's overall business. If Employee A is assigned
     to solicit bids, appropriate safeguards must be put in place to ensure no
     actual conflict occurs; this may include a secondary review by another
     employee (who is not under Employee A's supervision) in the event vendor X
     submits a winning bid.

5.   QUESTION: Employee M is one of a team of five employees who have been
     assigned responsibility for selecting a new software vendor. The total
     value of the contract is about $5 million. Shortly after being assigned to
     work on this project, M learns that two vendors are under consideration:
     ABC Corp., and XYZ, Inc. M owns 100 shares of ABC. The shares are currently
     worth about $2,000, less than 2% of Employee M's total investments, and a
     negligible percentage ABC's total outstanding shares. If ABC were awarded
     the Amex contract, it would represent less than 1% of the company's annual
     revenues. What are M's responsibilities under the Code?

     ANSWER: Since ABC Corp. is a prospective vendor and M has a financial
     interest in ABC, Section IV.C.5 requires that he disclose his interest in
     ABC in writing to his Department Director (or next higher level officer)
     and obtain written approval from his Executive Vice President before
     working on any matter involving ABC. Under the Code, M cannot perform any
     work on a matter involving ABC until he has both disclosed his interest to
     his department head and obtained prior written approval from his Executive
     Vice President.

     Given the specific facts and circumstances presented ( i.e., the de minimis
     nature of M's interest in ABC, the non-materiality of the potential
     contract to ABC, and the fact that M would not have exclusive
     responsibility for selecting the software vendor), M's Executive Vice
     President may determine that M should be permitted to work on the
     procurement matter. However, the Executive Vice President has discretion in
     this area, and may determine that it is preferable to assign matters
     relating ABC to an employee other than M.

     Detailed guidance regarding the circumstances in which employees should and
     should not be permitted to work on matters that involve a vendor (or
     potential vendor) in which the employee has an interest are set forth in
     the Section IV Supervisory Procedures, below.

6.   QUESTION: Employee A, an attorney who owns 25 shares of Microsoft stock,
     has been assigned to negotiate a contract with that company. A does not
     believe that this very small interest will affect his ability to exercise
     independent judgment in the matter. He therefore decides that he will not
     disclose his interest to Department Director (or next higher level
     officer). Is this permissible under the Code?

     ANSWER: No. Although A's interest is de minimis, it presents a conflict of
     interest and therefore he was required to disclose it in writing to his
     Department Director (or next higher level officer) and to obtain prior
     written approval from his Executive Vice President before working on a
     matter involving Microsoft.

7.   QUESTION: For several years, Employee X has had procurement
     responsibilities for Vendor A. X has begun negotiating with the vendor
     regarding possible employment. May X continue to work on Amex matters
     involving the vendor?

     ANSWER: Before performing any further work on procurement matters involving
     vendor A, the employee must notify his Department Director (or next higher
     level officer) of the conflict. Under the circumstances, the department
     head would likely determine that responsibility for the vendor should be
     assigned to another employee.

8.   QUESTION: Can Employee A accept a commission or price discount from his
     stock broker after being told the discount is being granted because he
     works for Amex?




     ANSWER: No. This would violate the Code's provisions relating to Conflicts
     of Interest (Section IV) and Security Accounts, Positions, and Transactions
     (Section VIII ), and may also be considered to violate the Code's
     provisions relating to Business Gifts, Gratuities, and Courtesies (Section
     IX ). Employee A could accept a discount only if it was not being granted
     due to his position with Amex, was not offered as a quid pro quo or a
     favor, and was available to other similarly situated individuals. Thus,
     Employee A could accept the discount if the broker offered it to all
     customers who generated over $5,000 in annual commissions and Employee A
     satisfied this $5,000 threshold.

9.   QUESTION: Can Employee A construct a personal Web page on the Internet that
     indicates the employee works for Amex and claims that Amex's trading
     analysis process is biased and its disciplinary actions are unfair?

     ANSWER: No. This would violate Section IV of the Code. The combination of
     this content of Employee A's Web page is likely to adversely affect public
     confidence in the integrity or credibility of Amex procedures or actions.
     It is not unreasonable to expect that anyone visiting Employee A's Web page
     would, correctly or not, assume that Employee A has some special knowledge
     of the trading analysis and disciplinary areas as a result of his
     employment with Amex. If the employee made such a claim based on specific
     Amex internal information (as opposed to simply opinion), and/or disclosed
     such information, this would also violate the Code's Information Disclosure
     provisions.

     By contrast, employee A generally would not violate the Code of Conduct by
     merely indicating he works for Amex, ( e.g., as part of his general
     biographical information).

     Further, to the extent that Employee A uses his personal Web page to engage
     in securities-related writing, Section VII.B.8 of the Code of Conduct
     requires, among other things, that A obtain prior written approval from his
     Executive Vice President.

10.  QUESTION: Employee A was hired in Issuer Services to help attract and
     retain issuers based on his extensive contacts, relationships and business
     dealings with public and private companies and their key personnel. How
     does the Code of Conduct affect Employee A's ability to perform his Amex
     duties?

     ANSWER: Employee A was hired for his specific "networking" capabilities and
     "business connections" in order to attract and retain Amex. By itself, this
     does not create an actual or apparent conflict of interest that would
     prevent Employee A from performing the job he was hired to do. However, an
     actual conflict of interest may arise if Employee A has a particularly
     close relationship ( e.g., immediate family) with an employee of a targeted
     company. If such a relationship exists, Employee A would be required to
     inform his Department Director of the relationship, if the relationship had
     not previously existed or been disclosed. If Employee A's relationship is
     with an individual who lacks ability to influence the targeted company's
     listing decisions ( e.g., employee's brother is a plant manager for the
     company), Employee A may work with the targeted company. However, if the
     relationship is with an individual who may have an ability to influence the
     targeted company's listing decisions ( e.g., his brother is the Chief
     Operating Officer of the company), Employee A may not work with the
     targeted company unless he first receives written approval from his
     Executive Vice President.

11.  QUESTION: Employee A, who was formerly employed by an Amex member, receives
     an amended Form U-5 and learns that he has been named in a customer
     complaint that alleges fraud and seeks compensatory damages of $100,000.
     What are Employee A's obligations under the Code of Conduct?

     ANSWER: Employee A must immediately provide written notification to his
     Department Director to disclose this event. This may be accomplished
     through an e-mail, memo, or providing a copy of the amended U-5. The
     Department Director will then decide what effect, if any, this disclosure
     will have on Employee A's ability to effectively discharge his Amex duties.



12.  QUESTION: If Employee B participates in the Standard and Poor's Depositary
     Receipts (SPDRs) Employee Purchase Plan, will he be deemed to have a
     conflict of interest with respect to regulatory matters ( e.g., conducting
     examinations, or handling complaints, investigations, or disciplinary
     proceedings) involving Computershare?

     ANSWER: Computershare simply acts as the administrator of the Plan, and
     Plan accounts are not standard Computershare brokerage accounts: employees
     who have Plan accounts can use them only to buy and sell SPDRs or Nasdaq
     100 Index Tracking Stock. Therefore, if B's Plan account is his sole
     account with Computershare, he is not deemed to have a conflict with
     respect to regulatory matters that involve Computershare. However, if B or
     members of B's immediate family maintain other accounts with Computershare,
     or if B controls trading in, or has a financial interest in, other
     Computershare accounts, this should be disclosed to his Department Director
     (or next higher level officer), and prior written approval should be
     obtained from B's Executive Vice President before he is assigned to
     regulatory matters involving Computershare.

13.  QUESTION: Section IV.C prohibits employees from engaging in unlawful
     activities in an effort to promote Amex's interests. What types of
     activities are covered by this provision?

     ANSWER: While it is not possible to enumerate all of the types of unlawful
     conduct that are encompassed by this provision, violations of the federal
     securities, antitrust, and copyright laws are clearly among them.

     Thus, for example, the provision would encompass anti-competitive
     activities by an employee in attempting to advance Amex's interests.
     Examples of unlawful anti-competitive activities can be found in the Amex
     policy prohibiting harassment, intimidation, "refusals to deal," and
     retaliation. The policy, which was approved by the SEC, provides that:

                Employees, officers, directors and other officials
                and agents of the Amex must not engage, directly or
                indirectly, in any conduct that threatens, harasses,
                intimidates, constitutes a "refusal to deal" or
                retaliates against any member, employee of a member
                or any other market participant because (1) such
                member, employee or market participant has made a
                proposal to any exchange or market to list or trade
                any option class; (2) of such member's employee's or
                market participant's advocacy or proposals concerning
                the listing or trading of an option class on any
                exchange or other market; (3) such member, employee
                or market participant commenced making a market in or
                trading any option class on any exchange or other
                market; (4) such member, employee or market
                participant seeks to increase the capacity of an
                options exchange or the options industry to
                disseminate quote or trade data; (5) such member,
                employee or market participant seeks to introduce new
                option products; or (6) such member, employee or
                market participant seeks to act competitively.

     Additionally, the provision would encompass making or using unlicensed
     copies of computer software. Such conduct violates both federal copyright
     law and the Amex's Information Security Policy.

14.  QUESTION: Employee A works for the Amex and has recently married a NYSE
     employee. What are A's obligations under the Code?

     ANSWER: Under Section IV.D.1 of the Code, a conflict of interest is
     presumed to exist whenever a member of an employee's immediate family works
     for an exchange other than that which employs the employee. A is required
     to disclose the conflict in writing and may not work on matters involving
     the NYSE without prior written approval from his Executive Vice President.



15.  QUESTION: Code of Conduct Section IV.B.3 requires employees to disclose to
     Amex if they become subject to any occurrence that would require disclosure
     on a Form U-4 or U-5 if the employee worked for a broker/dealer. What
     incidents must be disclosed on these forms?

     ANSWER The following is a summary of the types of information required to
     be disclosed:

     a.   Actions by a domestic, military or foreign court:

          1.   Having been convicted, pled guilty or pled nolo contendere to a
               felony or misdemeanor involving investments or an
               investment-related business, fraud, false statements or
               omissions, wrongful taking of property, bribery, perjury,
               forgery, counterfeiting, extortion or a conspiracy to commit any
               of these offenses.

          2.   Having been convicted, pled guilty or pled nolo contendere to any
               other felony.

          3.   Having been personally charged, or exercising management or
               policy control over an organization that has been charged, with
               any felony or misdemeanor listed above.

          4.   Having been enjoined in connection with any investment-related
               activity.

          5.   Having been found to be involved in a violation of any
               investment-related statutes or regulations.

          6.   Having dismissed, pursuant to a settlement agreement, an
               investment-related civil action brought by a state or foreign
               financial regulatory authority.

     b.   Actions by the Securities and Exchange Commission or the Commodity
          Futures Trading Commission:

          1.   Having been found to have made a false statement or omission; to
               have been involved in a violation of Commission regulations or
               statutes; or, to have been the cause of an investment-related
               business having its authorization to do business denied,
               suspended, revoked or restricted.

          2.   Having been the subject of an order in connection with an
               investment-related activity.

          3.   Having a civil monetary penalty imposed, or having been ordered
               to cease and desist from any activity.

     c.   Actions by other federal or state regulatory agencies, or by foreign
          financial regulatory authorities:

          1.   Having been found to have made a false statement or omission; to
               have been dishonest, unfair or unethical; to have been involved
               in a violation of investment-related regulation(s) or statute(s);
               or, to have been the cause of an investment-related business
               having its authorization to do business denied, suspended,
               revoked or restricted.

          2.   Having been the subject of an order in connection with
               investment-related activity.

          3.   Having a registration or license denied, suspended or revoked, or
               otherwise, by order, prevented from associating with an
               investment-related business, or restricting activities.

          4.   Having authorization to act as an attorney, accountant, or
               federal contractor revoked or suspended.

     d.   Actions by any self-regulatory organization or commodities exchange:

          1.   Having been found to have made a false statement or omission; to
               have been involved in a violation of its rules (other than a
               violation designated as a "minor



               rule violation") or, to have been the cause of an
               investment-related business having its authorization to do
               business denied, suspended, revoked or restricted.

          2.   Having been disciplined by being expelled or suspended from
               membership, by being barred or suspended from association with a
               member, or by having activities restricted.

     e.   Consumer-initiated, investment-related complaints or proceedings:

          1.   Within the past 24 months, having been the subject of a complaint
               or proceeding that alleged involvement in a sales practice
               violation and contained a claim for compensatory damages of
               $5,000 (or more), or alleged involvement in forgery, theft,
               misappropriation or conversion of funds or securities.

          2.   Having been named as a respondent/defendant in a
               investment-related, customer-initiated arbitration or civil
               litigation which alleged involvement in a sales practice
               violation and is still pending; resulted in an award or judgment
               (regardless of amount); or was settled for $10,000 or more.

          3.   Having been subject to an investment-related, customer-initiated
               written complaint which alleged involvement in a sales practice
               violation, and which complaint was settled for $10,000 or more.

     f.   Bankruptcy or insolvency

          1.   Within the past 10 years, made a compromise with creditors, filed
               a bankruptcy petition or been subject to an involuntary
               bankruptcy petition.

          2.   Within the past 10 years, having exercised control over an
               organization which made a compromise with creditors, filed a
               bankruptcy petition or been subject to an involuntary bankruptcy
               petition.

          3.   Within the past 10 years, having exercised control over a
               broker/dealer, been the subject an involuntary bankrupt petition,
               or had a trustee appointed, or had a direct payment procedure
               initiated under the Securities Investor Protection Act.

     g.   Terminations and resignations:

          1.   Having voluntarily resigned, been discharged, or permitted to
               resign after accusations of violating investment-related
               statutes, regulations, rules or industry standards of conduct;
               fraud or the wrongful taking of property; or, failure to
               supervise in connection with investment-related statutes,
               regulations, rules or industry standards of conduct.

     h.   Other required disclosures:

          1.   Having a bonding company deny, revoke or pay out on a bond.

          2.   Having any unsatisfied judgments or liens.

     i.   Investigations:

          1.   Having been notified of being the subject of any investigation,
               regulatory complaint or proceeding by a domestic or foreign
               governmental body or self-regulatory organization with
               jurisdiction over investment-related businesses.

          2.   Becoming the subject of an internal review by a prior employer
               for fraud, wrongful taking of property, or for violating
               investment-related statutes, regulations, rules or industry
               standards of conduct.

          3.   Having been named in any pending investment-related civil action.





                          SECTION IV GENERAL PROCEDURES

DISCLOSURE OF CONFLICTS OF INTEREST

New Employees:

After starting work for Amex, each new employee must determine whether he has
any personal, business, or financial relationships that could create an actual
conflict of interest with his ability to perform his duties for Amex. Each new
employee must also determine whether he has any relationships that, to an
outside party, might create the appearance of a conflict of interest with his
ability to perform his duties for Amex.

If an actual or potential conflict of interest exists, the employee must provide
written notification to his Department Director (or next higher level officer)
within two weeks of employment. For employees who are Executive Vice Presidents
(or higher levels) the above disclosure is to be made to the General Counsel of
Amex.

The notification must include the employee's name, date of the notification,
description of the relationship causing the conflict of interest, and statement
of whether the employee believes the situation represents an actual or potential
conflict of interest (or an appearance of a conflict of interest). The employee
should retain a copy of the notification for his own records. Unless written
approval is received from his Executive Vice President, the employee must
refrain from working on any Amex matters where a conflict of interest exists.

Although disclosure must be made in writing, there is no required form, and
e-mail is permissible.

Current Employees:

If a change occurs in an employee's duties for Amex or in his personal,
business, or financial relationships that would act to create an actual or
potential conflict of interest (or an appearance of a conflict of interest) with
his ability to perform his duties for Amex, the employee must provide written
notification of the conflict of interest in the same manner as described above.
Notification must be provided within two weeks of the change that gave rise to
the conflict, and the employee should retain a copy for his records. Unless
written approval is received from his Executive Vice President, the employee
must refrain from performing Amex duties where an actual or potential conflict
of interest exists. If, while performing Amex duties, an employee determines
that he has been placed in a situation that creates a conflict of interest (or
the appearance of a conflict of interest), he must immediately provide written
notification in the same manner described above and recuse himself from further
work on the project unless written approval is received from his Executive Vice
President.

                        SECTION IV SUPERVISORY PROCEDURES

Certain conduct will always be considered to be in conflict with the interests
of Amex. Employees may not engage in this conduct and an Executive Vice
President may not grant



waivers to permit employees to engage in such conduct. A non-exhaustive list of
such conduct includes an employee's:

     a.   Engaging in bribery or attempted bribery.

     b.   Selling or possessing illegal drugs while on Amex premises or
          business.

     c.   Stealing money, computers, computer parts or other assets from Amex.

     d.   Removing company assets or property from company premises without
          proper authorization or permission.

     e.   Submitting false documents ( e.g., Travel and Entertainment Forms;
          Employee Time Reports) to obtain funds to which the employee is not
          entitled.

     f.   Disclosing or trading upon non-public information gained in the course
          of Amex employment (such conduct may also violate federal prohibitions
          against insider trading, Code of Conduct (Sections V Information
          Disclosure) and (VIII.E Trading Restrictions), as well as the Amex
          Information Security Policy).

     g.   Participating in an arbitration, mediation, or disciplinary proceeding
          in which: any party, counsel or adjudicator is a member of an
          employee's immediate family; or the employee is negotiating employment
          with any party or counsel involved in the proceeding.

In determining whether to approve an employee to work on Amex matters where a
potential conflict of interest exists, an Executive Vice President should
examine the nature of the relationship between the employee and the person with
whom the potential conflict of interest exists. Specifically, the Executive Vice
President should determine whether it is a very close relationship ( e.g.,
spouse, parents, siblings, children, business partners, friends an employee
dines with weekly) or a more distant relationship ( e.g., cousins, former
co-workers, friends an employee rarely sees). In addition, Executive Vice
Presidents should assess the job duties and positions of the employee and the
person with whom the potential conflict of interest, and the size and structure
of the organization with which Amex will be dealing.

There is no "bright line" test for determining whether to permit an employee to
conduct Amex business where the appearance of a conflict of interest exists.
Generally, the closer an employee's relationship to another person with whom
Amex conducts business, the less reasonable it becomes for him to conduct Amex
business with that person. Also, the higher an employee's position with Amex or
the other person's position in his organization, or the smaller or less
geographically diverse the other organization is, the less reasonable it becomes
to permit the employee to conduct Amex business with the other organization

Additionally, whenever an Executive Vice President permits an employee to
conduct Amex business with another person where the potential for a conflict
exists, adequate supervisory safeguards must be put in place. The ability to
provide adequate safeguards may also affect the decision whether to permit the
activity.

In identifying situations or relationships that have a high potential for
creating the appearance of, or an actual, conflict of interest, each situation
or relationship must be considered in light of the facts surrounding it. Absent
an actual conflict of interest, and if adequate supervisory safeguards can be
put in place, an Executive Vice President has wide discretion in considering
whether to approve a work assignment in a potential conflict situation. It is
not possible to list all the situations that can arise or to create a definitive
list of relationships in which an employee may or may not act on behalf of Amex.
However, the following are a few examples of potential or actual conflicts which
might arise and how they should be handled under the Amex Code of Conduct.




Examinations, Investigations, and Other Regulatory Reviews

Employees should not be assigned to conduct an examination, investigation, or
regulatory filing review ( e.g., Amex listing application, advertising,
financial, etc.) of any Amex member: (a) that employs a member of the employee's
immediate family; (b) that has employed the employee or a member of his
immediate family at any time during the prior three years; or (c) with which the
employee is negotiating employment.

Employees generally should not be assigned to conduct an examination,
investigation, or regulatory filing review of an Amex member at which the
employee or a member of his immediate family maintains an interest in a security
account. However, because the mere fact that an employee or a member of his
immediate family maintains an account with a broker/dealer would not necessarily
impair an employee's ability to perform his regulatory functions ( e.g.,
participate in the examination of a broker/dealer where an employee maintains an
account). Therefore, Executive Vice Presidents may determine that the facts and
circumstances of an individual case warrant the grant of a waiver.

Employees generally should not be assigned to conduct an examination,
investigation, or regulatory filing review ( e.g., Amex listing application,
advertising, financial, etc.) of any Amex member that employs anyone with whom
the employee has a close personal relationship. Nevertheless, the total facts
should be considered in determining whether such an assignment would create a
conflict of interests. For example, the mere fact that a large organization
employs a close friend of an Amex employee should not be disqualifying if the
friend's responsibilities are unrelated to the Amex employee's regulatory
duties.

Employees generally should not be assigned to conduct an examination,
investigation, or regulatory filing review ( e.g., Amex listing application,
advertising, financial, etc.) regarding any security in which the employee
maintains an ownership interest, controls trading, or has a financial interest.

Employees should not accept any business gift or courtesy (other than coffee,
tea, soft drinks, and similar items of nominal value) from an Amex member or
issuer while he is conducting an examination, investigation, or other regulatory
review involving the Amex member or issuer. (The acceptance of such gifts or
courtesies also would violate Code of Conduct Section IX, Business Gifts,
Gratuities, and Courtesies.

Disciplinary, Arbitration, Mediation, and Delisting Proceedings

Employees should not be assigned to conduct a disciplinary, arbitration,
mediation, or delisting proceeding if the employee is negotiating for employment
with any party (or an attorney representing any party) or if a party (or
attorney for a party) employs a member of an employee's immediate family.

Employees should not accept any business gift or courtesy (other than coffee,
tea, soft drinks, etc.) from a party (or an attorney representing a party)
involved in a disciplinary, arbitration, mediation or delisting proceeding while
the proceeding is in progress or subject to appeal. This would also violate Code
of Conduct Section IX, Business Gifts, Gratuities, and Courtesies.





Dealing with Vendors

If an employee is assigned to work on a matter involving a vendor in which the
employee has an interest, the employee must disclose that interest to his
department head before performing any work on the matter. Disclosure is required
if: 1) an employee personally has an interest in a vendor ( e.g., by holding
vendor stock in the employee's own account); 2) such stock is held in an account
in which an employee has a financial interest or can control trading ( e.g.,
vendor stock that is held in the account of a spouse or minor child); 3) a
potential conflict stems from the interests of members of the employee's
immediate family ( e.g., an employee's sibling or spouse works for a vendor for
which the Amex employee has work-related responsibility); or 4) an employee is
negotiating for employment with a vendor.

Although disclosure must be made in writing, there is no required form, and
e-mail is permissible.

Once an employee has disclosed a vendor interest, the department head may
determine that the matter should be assigned to another employee. If the
department head determines to reassign the matter to another employee, the issue
is resolved and no further action is required.

However, if the department head determines that it would be preferable ( i.e.,
in Amex's best interests) not to reassign the matter, the department head must
seek Executive Vice President approval: under the Code, an employee with a
vendor interest cannot work on any matter involving that vendor without prior
written Executive Vice President approval.

In determining whether to allow an employee to work on a matter involving a
vendor in which the employee has an interest, an Executive Vice President should
consider the significance of the employee's vendor interest. An Executive Vice
President also should consider: 1) whether the employee would have exclusive or
substantial decision-making responsibility in the vendor-related matter; 2)
whether adequate supervisory safeguards could be put in place if the employee
were allowed to work on the matter ( e.g., requiring additional review of the
employee's handling of a vendor-related matter); 3) the relative significance of
a contract or potential contract to the vendor ( i.e., whether the award or loss
of Amex business would constitute a material development that would affect the
value of the vendor's stock); and 4) and the feasibility of transferring
responsibility for a given vendor to other employee(s).

An Executive Vice President should not permit an employee to work on a matter
involving a vendor with which the employee is negotiating for employment, and an
employee generally should not be permitted to work on a matter involving a
vendor that employs a member of the employee's immediate family.

In the context of vendor investments, an employee may be permitted to work on a
matter in which the employee's interest in the vendor is de minimis: i.e., less
than 2% of the employee's total investments and less than 1% of the vendor's
outstanding shares. Such de minimis investments generally do not threaten the
employee's ability to exercise independent judgment in conducting AMEX business.
Even when a vendor investment is de minimis, however, an Executive Vice
President is free to determine that it is preferable to assign another employee
to the matter.

More significant vendor investments require additional analysis in light of the
four factors described above. Further, the Executive Vice President should be
aware that, as the



significance of an employee's interest in a vendor increases, the
appropriateness of the employee's involvement in matters relating to the vendor
declines. This is particularly so if the vendor-related matters in which the
employee would be involved are significant and therefore could affect the value
of the vendor's stock. Thus, the conflicts of interest presented by vendor
investments should be viewed as a continuum: at or below a de minimis level such
investments do not necessarily require an employee's disqualification, but a
significant vendor investment should preclude an employee from working on a
matter involving a vendor.

Loans from Amex Members

Employees may not accept loans from an Amex member except when it is clear that
the motivation for the loan is a family or personal relationship, or the loan is
made in the context of a routine banking or brokerage relationship. Nor may
employees make loans to Amex members except when it is clear that a family or
personal relationship motivates the loan.

Former Employers

Generally, Executive Vice Presidents should not approve a work assignment for an
employee that involves dealing with an organization that has previously
terminated (or permitted to resign while under investigation) the employee (or a
member of his immediate family) while under investigation because the potential
conflict of interest in this situation usually cannot be minimized to an
acceptable level of risk. While this is particularly true in the regulatory
areas of Amex's business ( e.g., examinations, investigations, or reviews of
regulatory filings), this also applies to non-regulatory areas ( e.g.,
contracting with vendors). Nonetheless, if adequate supervisory safeguards can
be implemented, work may be conducted with the prior written approval of the
employee's Executive Vice President.

REVIEWING CONFLICTS OF INTEREST DISCLOSURES

When an employee notifies his Department Director (or next higher level officer)
that he may have a personal, business, or financial relationship that would
create an actual or potential conflict of interest with his ability to perform
his duties for Amex, the Department Director (or next higher level officer)
must:

     1.   Review the disclosure made by the employee.

     2.   Discuss the matter with the employee, as necessary.

     3.   Determine whether the disclosed relationship presents an actual
          conflict, a potential conflict, the appearance of a conflict or no
          conflict of interest (including consulting the General Counsel of Amex
          for guidance, if needed).

     4.   Have a copy of the notification submitted by the employee placed in
          the employee's personnel file.

Actual Conflicts of Interest: If an actual conflict of interest exists, the
Department Director (or next higher level officer) must take any steps necessary
to ensure that the employee is not assigned to work on any Amex matters
involving the party with whom the employee has the conflict of interest. This
should include notifying the employee's immediate supervisor of the conflict and
any other appropriate action.

The Department Director (or next higher level officer) must also evidence in
writing whether he has determined that an actual conflict of interest exists,
send a copy to the Human Resources



Department (to be filed in the employee's personnel file) and the Code of
Conduct Administrator will provide the employee with a written acknowledgment
that the Department Director (or next higher level officer) was informed of the
conflict of interest. This may be accomplished by the Department Director (or
next higher level officer) noting his determination on the employee's original
notification and sending copies to the appropriate parties.

Potential Conflicts of Interest: Potential conflicts of interest exist when an
employee has a relationship that an outside party would reasonably view as
precluding the employee from being able to act without being influenced by that
relationship. If a potential conflict of interest exists, the Department
Director (or next higher level officer) should notify the employee's immediate
supervisor of the potential conflict and document the potential conflict of
interest in the same manner as an actual conflict of interest (described in
paragraph B., above). The Department Director (or next higher level officer)
must also document any restrictions placed on the employee to reduce the
potential for conflict from becoming an actual conflict of interest. Whenever
possible, the employee should not be assigned to work on any Amex matters
involving an Amex member, issuer, vendor or other party with whom the employee
has a potential conflict of interest.

Situations may arise in which a Department Director (or next higher level
officer) believes it is in Amex's best interests to assign an employee with a
potential (but not an actual) conflict of interest to work on an Amex matter
involving an Amex member, issuer, vendor or other party with whom the employee
has the potential conflict of interest. In these situations, written approval
must be obtained from the employee's Executive Vice President before the
employee starts work on the assignment.

No Conflict of Interest: If an employee discloses a situation that he believes
may constitute a conflict of interest, but the Department Director (or next
higher level officer) determines no actual or potential conflict of interest
exists, no further supervisory action is required. Administratively, the
Department Director (or next higher level officer) should record his
determination on the employee's original notification and have it filed in the
employee's personnel file, the Code of Conduct Administrator and provide a copy
to the employee.

     A.   Executive Vice President Approval for Conflicts of Interest: Regarding
          another party to Amex business, he may not work on that matter.
          Approval to work on such matters should not be granted by the
          applicable Executive Vice President.

     B.   Potential Conflicts of Interest: With the prior written approval of
          his Executive Vice President, an employee may be assigned to work on
          Amex business where there is a potential (but not an actual) conflict
          of interest. To obtain Executive Vice President approval, the
          Department Director (or next higher level officer) must send the
          Executive Vice President a copy of the employee's disclosure of the
          potential conflict, the Department Director's (or next higher level
          officer's) acknowledgment of the conflict and the reason(s) why the
          Department Director (or next higher level officer) believes it is
          appropriate for the employee to be assigned to work on the matter
          involving the Amex member, issuer, vendor or other party with whom the
          employee has a potential conflict of interest. The Executive Vice
          President must note his decision in writing. If an employee is
          authorized to work on a matter where there exists a potential conflict
          of interest, additional review or supervision of the employee's work
          will typically be required to ensure that the potential conflict of
          interest does not become an actual conflict of interest. A copy of the
          Executive Vice



          President's decision must be sent to the Human Resources Department
          (to be filed in the employee's personnel file), the Code of Conduct
          Administrator, the Department Director (or next higher level officer)
          and the employee involved. (This may be accomplished through the
          Executive Vice President recording the appropriate notations on the
          employee's original notification and sending copies to the appropriate
          parties).

                            V. INFORMATION DISCLOSURE

A.   General Provisions

The nature of our business often causes employees to receive or have access to
confidential, sensitive, or non-public information. Employees must act to
preserve the security and confidentiality of such information. Employees must
exercise special care if they need to discuss confidential or sensitive
information with another employee in a public place, such as a restaurant,
elevator, or airplane, to ensure such information is not inadvertently overheard
by others.

B.   Specific Prohibitions

     Employees are specifically prohibited from:

     1.   Disclosing to, or discussing with, any unauthorized person any
          information not generally available to the public (unless prior
          approval is obtained from his Executive Vice President). This
          prohibition does not apply to information disclosed or discussed by
          employees in fulfilling responsibilities or duties that are within
          their job description. Some examples of non-public information
          include, but are not limited to:

          a.   Amex's strategic plans or initiatives;

          b.   advertising or marketing plans and strategies;

          c.   technological information regarding Amex systems or technology
               strategies;

          d.   information provided by a broker/dealer regarding its financial
               position, business, or trading strategies;

          e.   information related to regulatory investigations in progress;

          f.   questions, or answers to questions, contained in securities
               licensing tests; or

          g.   non-public information concerning other corporate strategies,
               examinations, disciplinary actions, arbitration proceedings,
               settlements of lawsuits or administrative proceedings, economic
               data, personnel information, or other information regarding
               issuers, Amex members, Amex employees, or arbitrators.

     2.   Responding to inquiries received from the news media. Any inquiries
          received must be referred immediately to the Corporate Communications
          Department or the designated spokesperson.



     3.   Transmitting confidential or sensitive information to other employees
          within Amex other than to fulfill the business needs of Amex.
          Employees are expected to comply with all corporate policies relating
          to the handling of confidential or sensitive information ( e.g.,
          Information Security Policy and Acceptable Use Policy). An employee
          who receives a request for information by persons who would appear to
          have no need for such information in the daily performance of their
          jobs shall immediately report the request to the employee's Department
          Director (or next higher level officer).

LISTED BELOW ARE INTERPRETATIONS AND PROCEDURES RELATING TO THE ABOVE SECTION.

                            SECTION V INTERPRETATIONS

     1.   QUESTION: Through the normal course of his work, Employee A obtains
          non-public information about Company X. Employee A shares this
          information with Employees B and C, and tells them it is confidential.
          Neither B nor C has any need for this information in connection with
          their jobs at Amex, but both B and C know Employee A routinely
          receives non-public information. Employee B purchases 100 shares of
          Company X's stock, in anticipation of a price rise when the
          information becomes public. The next day, the information becomes
          public and the price of Company X's stock goes up 40%. The day after
          the price rise, Employee B sees Employee C in the hallway and brags
          about how much money he made because of Employee A's information. A
          month later, during its investigation into trading in Company X's
          stock, the Amex Market Regulation Department identifies Employee B as
          a purchaser. After this, Employee C tells Market Regulation about his
          conversations with Employees A and B, both before and after Company
          X's information became public. Has Employee A, B, or C violated the
          Code of Conduct?

          ANSWER: Employee A has violated the Code of Conduct by failing to
          maintain the confidentiality of information received through his
          position with Amex, since Employees B and C have no business need for
          the information.

          Employee B has also violated Code of Conduct Section VIII by engaging
          in a personal transaction based on non-public information gained
          through Amex employment. More importantly, since the information in
          question apparently was material non-public information for purposes
          of the federal securities laws, both Employees A and B have likely
          violated the laws that prohibit insider trading (trading on material,
          non-public information) and could be subject to a civil enforcement
          action or criminal prosecution.

          In addition, employees are obligated to report violations of the Code
          of Conduct to the Office of General Counsel or the Internal Review
          Department. After the conversation in which Employee B told Employee C
          that he had traded on the information from Employee A, Employee C
          should have known that Employee B had violated the Code of Conduct and
          reported this information.

     2.   QUESTION: Arbitration Employees A, B, and C are at lunch in a
          restaurant. During lunch, they discuss an arbitration decision, which
          has yet to be issued. Unknown to Employees A, B and C, the attorney
          for one of the parties is in the adjoining booth and overhears the
          conversation. Has Employee A, B, or C violated the Code of Conduct?

          ANSWER: Employees A, B, and C have all violated the Code of Conduct by
          failing to exercise special care when discussing Amex matters in
          public.

     3.   QUESTION: Issuer Services Employee A receives a request from Employee
          B for the names of the companies on which Issuer Services will be
          focusing its marketing efforts. Employee B works in a department which
          would seem to have no need for this type of information. What should
          Employee A do?

          ANSWER: Since confidential or sensitive information should be
          transmitted within the Amex on a need-to-know basis, Employee A should
          not provide the information requested. Employee A



          should notify his Department Director (or next higher level officer)
          of Employee B's request. Employee A's Department Director should
          contact Employee B's Department Director to determine if there is a
          business need for the information. If so, the information should be
          provided. If there is no business need for the information, Employee
          B's Department Director should determine whether Employee B
          understands the need to keep information confidential and should
          re-educate Employee B on this point. If it appears to Employee B's
          Department Director that Employee B has previously sought or obtained
          confidential information for which he has no legitimate need, the
          Department Head should report the matter to the Amex Office of General
          Counsel or the Internal Review Department.

                          SECTION V GENERAL PROCEDURES

AUTHORIZATION TO RELEASE INFORMATION:

An employee who has been authorized to release information in accordance with
his normal job duties or Amex policies or procedures ( e.g., Authorized Media
Spokesperson; Public Disclosure Program Information) may do so without the need
for further specific written authorization.

RESPONDING TO MEDIA REQUESTS

The Corporate Communications Department is responsible for determining who will
be authorized as a spokesperson and what procedures will be followed in
responding to the media. If an employee who is not authorized to respond to
media receives a request for information from the media, the employee should
follow the procedures set forth in the Media Relations Guidelines.

                        SECTION V SUPERVISORY PROCEDURES

Disclosure of Information

Department Directors (and next higher level officers) should take any steps
necessary to provide reasonable assurance that employees are aware of the need
to maintain the confidentiality of sensitive information received during the
course of their employment with Amex. At a minimum, this would require
Department Directors (and next higher level officers) to educate and train their
staff in: the type(s) of information that their Department receives or produces
that is deemed to be confidential or sensitive; the requirements for handling
confidential information; and Amex's information-handling policies.

If a Department Director (or next higher level officer) is informed by his
employee that another Amex employee has requested information which does not
appear to be necessary in the performance of the other employee's job, the
Department Director (or next higher level officer) should contact the other
employee's Department Director (or next higher level officer) in order to
determine the business need for the information. If it is determined that the
other employee had no business need for the information requested, then the
matter should be referred to the Amex Office of General Counsel.

Responding to Media Requests

Department Directors (and higher level officers) are required to be familiar
with the current Media Relations Guidelines, as revised from time to time, and
to take any steps necessary to provide reasonable assurance that all media
requests are referred or handled properly. At a minimum, this would require
Department Directors (and next higher level officers) to educate and train their
staff in the requirements of the Media Relations Guidelines. Anyone who is
authorized as a spokesperson must limit his response to information that he has
been



authorized to disclose. The Corporate Communications Department is responsible
for determining who will be authorized as a spokesperson for Amex and what
procedures will be followed in responding to the media.

                              VI. LEGAL PROCEEDINGS

Responses to requests for information or testimony in legal proceedings must be
coordinated with the Amex Office of General Counsel. In this regard:

     1.   All matters involving potential litigation must be referred to and
          discussed with the Amex Office of General Counsel, and counsel for the
          affected Amex operating division(s), at the earliest opportunity.

     2.   Any employee who is served with a subpoena, complaint, or other legal
          pleading that relates to his employment with Amex or involves an Amex
          member, regulated firm, or issuer must immediately notify his
          Department Director (or next higher level officer) and the Amex Office
          of General Counsel. The employee should then await instructions
          concerning compliance with the subpoena or pleading from the Amex
          Office of General Counsel.

     3.   No employee shall testify in any proceeding in respect to securities
          or any matter related to Amex without prior approval of the Amex
          Office of General Counsel and notification to his Executive Vice
          President. This provision does not apply to proceedings initiated by
          Amex ( e.g., disciplinary hearings).

     4.   No employee shall act as a witness, expert, consultant, or adjudicator
          in any Amex-sponsored arbitration, mediation, early neutral
          evaluation, hearing, or other proceeding, on behalf of any party other
          than Amex (except Hearing Officers, when carrying out their
          responsibilities relating to disciplinary proceedings under the
          applicable Amex rules).

Listed below are interpretations and procedures relating to the above section.

                           SECTION VI INTERPRETATIONS

     1.   QUESTION: Employee A receives a subpoena to produce documents and
          testify in a private civil action regarding an examination he
          conducted at an Amex member firm. What is required to be done under
          the Code of Conduct?

          ANSWER: Employee A must immediately report the receipt of the subpoena
          to his Department Director (or next higher level officer) and to the
          Amex Office of General Counsel. The Office of General Counsel will
          instruct Employee A regarding compliance with the subpoena.

     2.   QUESTION: Employee A receives a summons to appear for jury duty.
          Employee B receives a subpoena to testify as a witness to a
          hit-and-run accident. What is required to be done under the Code of
          Conduct?

          ANSWER: In contrast to question 1, Employee A is not being summoned to
          testify, only for potential ury service. Employee B is being summoned
          to testify, but about a matter that is unrelated to securities or
          Amex. Neither of these events requires notification under the Code of
          Conduct. However, Employees A and B would both be subject to the "Jury
          Duty/Court Appearance Policy" contained in the Amex Employee Handbook.
          Among other things, this policy would require each of them to notify
          his respective supervisor of his need to appear in court to fulfill
          his civic obligations.





                          SECTION VI GENERAL PROCEDURES

An employee must provide written notification to his Department Director (or
next higher level officer) and the Amex Office of General Counsel regarding any
potential litigation involving Amex. This includes the receipt of a subpoena or
other legal request received by the employee that (a) is related to his
employment with Amex or involves an Amex member, regulated firm, issuer or Amex
business and (b) requires the employee's appearance related to an Amex matter or
the production of Amex records or information. An employee can meet the written
notification requirement by providing a copy of the subpoena (or other written
legal request) to the appropriate persons.

The Amex Office of General Counsel is responsible for determining the procedures
to be followed to comply with subpoenas and other legal matters involving Amex.
In order to ensure Amex complies with legal requests, employees must follow
instructions received from the Amex Office of General Counsel. These
instructions may be written or verbal, as deemed appropriate by the Amex Office
of General Counsel.

                        SECTION VI SUPERVISORY PROCEDURES

RESPONDING TO SUBPOENAS AND OTHER LEGAL REQUESTS

Department Directors (and next higher level officers) are required to refer all
matters involving potential litigation to the Amex Office of General Counsel.
Department Directors (and next higher level officers) should take any steps
necessary to provide reasonable assurance that all subpoenas and other legal
requests are recorded and handled properly. At a minimum, this would require
Department Directors (and next higher level officers) to educate and train their
staff in the requirements for handling these documents and in the need to follow
the advice of the Amex Office of General Counsel in responding to these types of
requests.

                     VII. OUTSIDE EMPLOYMENT AND ACTIVITIES

A.   General Provision

Employees may not engage in any outside employment or other activity that would
create an actual or apparent conflict of interest with their concurrent Amex
employment.

B.   Specific Prohibitions

Employees are specifically prohibited from engaging in any outside employment or
activity that would entail:

     1.   Maintaining any securities or commodities licensing registrations.

     2.   Performing any work for any broker/dealer, person or entity registered
          under the Commodity Exchange Act, exchange, alternative trading
          system, electronic communications network, contract market, registered
          futures association, regulatory client of Amex, mutual fund, or
          investment adviser.

     3.   Performing any securities-related work for any bank or insurance
          company.



     4.   Performing any activity regarding securities matters involving any
          issuer or subscriber.

     5.   Performing any non-Amex work for, or providing non-Amex professional
          services to, anyone who participates in the employee's performance
          evaluations.

     6.   Using company stationery, logos, addresses, or telephone numbers in
          any manner that could be construed as indicating an outside activity
          is being performed on behalf of, or is sanctioned by, Amex.

     7.   Using Amex office facilities for conducting outside employment or
          other non-work-related activities. 8. Conducting any
          securities-related teaching, lecturing, or writing activities (other
          than those that may be part of an employee's designated job
          responsibilities), unless all of the following conditions are met:

          a.   the employee requests and receives prior written approval from
               his Executive Vice President;

          b.   the activity does not involve an organization that provides
               training designed to facilitate passing securities licensing
               requirements;

          c.   the employee clearly discloses that the views expressed are his
               own and not the views of Amex; d. compensation is not accepted
               from an Amex member; and e. any activity for which compensation
               is to be received is performed by the employee during personal
               time (e.g. vacation, leave without pay, after business hours)

C.   Service as Officer or Director of a Publicly Traded Company; Holding Public
     Office

     1.   An employee may not serve as an officer or director of a company that
          is listed on Amex without the prior written approval of the Audit
          Committee. An employee who wishes to serve as the officer or director
          of an Amex-listed company must submit (through his Department
          Director) a written request for approval to the employee's Chief
          Executive Officer. The employee's Chief Executive Officer will make a
          recommendation to the Audit Committee on whether the request should be
          approved or denied. The decision of the Audit Committee will be final.

     2.   An employee may not serve as an officer or director of any other
          publicly traded company without the prior written approval of the
          employee's Chief Executive Officer. An employee who wishes to serve as
          the officer or director of a publicly traded company that is not
          listed on the Amex must submit (through his Department Director) a
          written request for approval to the employee's Chief Executive
          Officer. The decision of the employee's Chief Executive Officer on the
          request will be final and will be reported to the Audit Committee.

     3.   If an employee wishes to serve as an officer or director of a company
          that is not publicly traded, the matter is handled in conformity with
          Subsection D ("Advance Notification of Outside Employment"), below.

     4.   An employee cannot hold elected or appointed political office without
          the prior written approval of the employee's Executive Vice President.
          An employee who wishes to hold political office must submit (through
          his Department Director) a written request for approval to the
          employee's Executive Vice President. The decision of the Executive
          Vice President on the request will be final.



D.   Advance Notification of Outside Employment and Activities

     1.   For any outside employment or activity not prohibited by Section VII.B
          or governed by Section VII.C, an employee must provide advance written
          notification to his Department Director (or next higher level officer)
          describing the nature of any planned outside employment or activity,
          including any compensation expected to be received. Proposed outside
          employment or activities disclosed pursuant to this subsection will be
          deemed permissible unless the Department Director (or next higher
          level officer) determines that the proposed employment or activity
          will create a conflict of interest and provides the employee with
          written notification of this determination.

     2.   If the nature of an employee's previously disclosed outside employment
          or activity changes, the employee is required to give written notice
          of this fact to his Department Director (or next higher level
          officer).

     3.   Exempt from the above notification provision are:

          a.   professional services ( e.g., preparation of a will or a tax
               return) provided for no fee to family members, friends, or
               charitable or civic organizations; and

          b.   other services provided to charitable or civic organizations for
               which an employee will not be compensated ( e.g., selling Girl
               Scout cookies; serving as President of a homeowners' association)

LISTED BELOW ARE INTERPRETATIONS AND PROCEDURES RELATING TO THE ABOVE SECTION.

                           SECTION VII INTERPRETATIONS

1.   QUESTION: Employee A wants to work in a small, privately held clothing
     store on weekends to make extra money. Is he required to obtain advance
     written approval from his Executive Vice President, or simply to give
     advance written notice to his Department Director?

     ANSWER: In these circumstances, the employee is merely required to give
     prior written notice to his Department Director because the proposed
     employment does not present a conflict of interest, is not prohibited by
     Section VII.B of the Code of Conduct, and does not involve
     securities-related teaching, lecturing, or writing. The Department Director
     is not required to take any affirmative action to approve the proposed
     outside employment: he is only required to take action if he believes that
     the proposed outside employment would conflict with the Code of Conduct.

2.   QUESTION: Employee A wants to perform telemarketing activities for a
     brokerage firm during evenings and weekends. Is this permissible under the
     Code of Conduct?

     ANSWER: No. Code of Conduct Section VII.B.1 specifically prohibits
     employees from performing any outside work for a broker/dealer.

3.   QUESTION: Employee A would like to teach a securities law class at a local
     university after business hours. Employee A will be paid for the activity.
     Is this permissible under the Code of Conduct?

     ANSWER: Prior to engaging in securities-related teaching, lecturing, or
     writing activities, Employee A must obtain written approval from his
     Executive Vice President. In this case, the proposed activity is likely to
     be approved because it does not present a conflict of interest and does not
     implicate any Code prohibitions. If approved, Employee A will be required
     to ensure he does not represent his views as being those of Amex.

4.   QUESTION: Employee A properly notified his Department Director that he was
     starting work as the closing bartender for a local restaurant. The
     Department Director determined this would not create a conflict of interest
     with Employee A's Amex duties. After two months, it becomes apparent that
     the quality of Employee A's work for Amex is deteriorating, apparently
     because he is always tired during



     the day. Can the Department Director force Employee A to give up his night
     job, based on the Code of Conduct?

     ANSWER: Employee A provided proper notice to his Department Director and
     his job is not creating an ethical conflict of interest; therefore the Code
     of Conduct would not require him to give up his second job. However,
     Employee A's second job is creating a performance issue that should be
     addressed by his Department Director in accordance with the "Corrective
     Action Policy" contained in the Employee Handbook.

                         SECTION VII GENERAL PROCEDURES

SECURITIES-RELATED TEACHING, LECTURING, WRITING

An employee is required to obtain written approval from his Executive Vice
President prior to conducting any securities-related teaching, lecturing, or
writing. The employee must submit a written request to his Executive Vice
President, with a copy to his Department Director (or next higher level
officer). The request must include the employee's name, date of the request, a
description of the work to be performed and the organization for which the work
is to be performed or publication in which the article will appear. If
compensation is to be received, the request must state this and the source of
the compensation. The employee should retain a copy of the notification for his
own records. If the proposed activity is approved, the Executive Vice President
must send a copy of the approval notice to the Code of Conduct Administrator and
the Human Resources Department to be filed in the employee's personnel file, and
a copy to the employee (who should retain it for his records).

POLITICAL OFFICE

An employee who wants to run for, or accept appointment to, a political office
must submit a written request and receive the approval of the employee's
Executive Vice President prior to starting a campaign, or accepting an
appointment. The employee must submit his request to his Department Director (or
next higher level officer). The request must include the employee's name, date
of the request, office being sought and a description of the duties of the
office, including a specific statement regarding whether the office has any
authority over issuing (or awarding any contract to issue) securities.

The employee's Department Director (or next higher level officer) will review
the request and forward it, along with a recommendation to approve or deny the
request, to the employee's Executive Vice President. The Executive Vice
President will review the request and either approve or deny it. The decision of
the Executive Vice President will be final and, if a request is denied, a reason
will be provided. The Executive Vice President will send a copy of the request
and its final disposition to the Code of Conduct Administrator and the Human
Resources Department to be filed in the employee's personnel file, with copies
to the employee, his Department Director (or next higher level officer), and
Amex Office of General Counsel.

Management will endeavor to act on any requests submitted within two weeks of
submission by the employee. However, management's failure to act within this
time frame will not constitute implicit approval, and employees may not begin to
run for political office or accept a political appointment until written
approval is received from the employee's Executive Vice President.




OFFICER OR DIRECTOR OF A PUBLICLY TRADED COMPANY

An employee who wants to serve as an officer or a director for a publicly-traded
company must submit a written request and receive the approval of his Chief
Executive Officer prior to accepting the position. The employee must submit his
request to his Department Director (or next higher level officer). The request
must include the employee's name, date of the request, office being sought and a
description of the duties of the office, including a specific statement
regarding whether the office has any authority over issuing (or awarding any
contract to issue) any security.

The employee's Department Director (or next higher level officer) will review
the request and forward it, along with a recommendation to approve or deny the
request, to the employee's Executive Vice President. The Executive Vice
President will review the request and forward it, along with a recommendation to
approve or deny the request, to the employee's Chief Executive Officer.

If the request relates to an issuer of securities listed on the Amex, the Chief
Executive Officer will review the request and forward it, along with a
recommendation to approve or deny the request, to the Audit Committee. The Audit
Committee will review the request and either approve or deny it. The decision of
the Audit Committee will be final and, if the request is denied, a reason will
be provided.

If the request relates to an issuer that does not have any securities listed on
Amex, the Chief Executive Officer will review the request and either approve or
deny the request. The decision of the Chief Executive Officer will be final and,
if the request is denied, a reason will be provided.

The Chief Executive Officer will send a copy of the request and its final
disposition to the Code of Conduct Administrator and the Human Resources
Department to be filed in the employee's personnel file, with copies to the
employee, his Department Director (or next higher level officer) and his
Executive Vice President.

Management will endeavor to act on any requests submitted within two weeks of
submission by the employee. However, management's failure to act within this
time frame will not constitute implicit approval, and employees may not accept
an offer to serve as an officer or director of a publicly-traded company until
written approval is received from the Chief Executive Officer (or, when
required, the Audit Committee).

OTHER OUTSIDE EMPLOYMENT

Employees may not engage in any activity that is specifically prohibited by the
Amex Code of Conduct. Additionally, an employee may not engage in any outside
employment that would create a conflict of interest with his duties to Amex. An
employee who wants to engage in outside employment that is not specifically
prohibited must provide advance written notice to his Department Director (or
next higher level officer).




PROSPECTIVE AND NEW EMPLOYEES

If a prospective employee is not planning to terminate all non-Amex employment
at the time of hire, this should be discussed with his Department Director (or
next higher level officer) during the interview process to determine whether the
outside employment it will create a conflict of interest with the employee's
Amex duties.

A new employee must provide written notice regarding his outside employment to
his Department Director (or next higher level officer) within two weeks of
starting work with Amex. This notice must include the employee's name, a
description of the outside work performed, the name of the outside employer, the
nature of the outside employer's business, whether compensation will be
received, the source of the compensation, and the date of the notice. The
employee should maintain a copy of the notice for his records. If the employee's
Department Director (or next higher level officer) determines that the outside
employment will create a conflict of interest with concurrent employment by
Amex, management must so advise the employee in writing within two weeks of
receiving the employee's notice. Once advised in writing that the outside
employment presents a conflict with his Amex responsibilities, the employee will
be required to terminate the outside employment within 21 days.

                       SECTION VII SUPERVISORY PROCEDURES

APPROVAL OF SECURITIES-RELATED TEACHING, LECTURING OR WRITING ACTIVITIES

Any outside securities-related teaching, lecturing or writing activities
requires the prior written approval of an employee's Executive Vice President.
Executive Vice Presidents should first ensure that the employee's request for
permission to engage in securities-related trading, lecturing, or writing
includes all necessary information (i.e., employee's name, date of request,
description of work to be performed, and the organization for which the work
will be performed or the publication in which the article will appear). The
Executive Vice President should then determine whether the proposed activity
will create any actual or potential conflict of interest with the employee's
duties to Amex. Any proposed activity that would create a conflict of interest
should be denied. Activities that do not create the potential for a conflict of
interest may generally be approved. The Executive Vice President must respond to
the employee's request within two weeks of receiving it. If a proposed activity
is denied, the Executive Vice President must note the reason(s) for the denial.
A copy of the Executive Vice President's response must be sent to the Code of
Conduct Administrator and the Human Resources Department (to be placed in the
employee's personnel file), the employee's Department Director (or next higher
level officer) and the employee.

If an Executive Vice President determines a proposed activity would benefit
Amex, the Executive Vice President may authorize the employee to engage in the
activity on behalf of Amex. In this event, the activity will no longer be
subject to the "outside employment" provisions of the Code of Conduct.

APPROVAL TO RUN FOR, OR ACCEPT APPOINTMENT TO, POLITICAL OFFICE

An employee who wants to run for, or accept an appointment to, a political
office must submit a written request to his Department Director (or next higher
level officer) and receive the approval of the employee's Executive Vice
President prior to starting a campaign, being nominated or accepting the
appointment. The Department Director (or next higher level



officer) must ensure the request includes all necessary information (i.e., a
description of the office being sought and the duties of that office, and
whether the office has any securities-related authority) and must determine
whether the proposed activity will create any actual or potential conflict of
interest with the employee's duties to Amex. The Department Director (or next
higher level officer) must then send the request, information regarding any
actual or potential conflicts of interest and a recommendation to approve or
deny the request to the employee's Executive Vice President. The Department
Director may not approve or deny the request.

The Executive Vice President will review the information submitted by the
employee's Department Director (or next higher level officer) and obtain any
additional information that he deems necessary.

The Executive Vice President will review the request, obtain any additional
information that he deems necessary, and make a decision regarding the request.
The decision of the Executive Vice President will be final. Generally, any
proposed activity that would create a conflict of interest or prevent an
employee from fulfilling his job duties with Amex should be denied.

The Executive Vice President will provide a written response either approving or
denying the employee's request. If the request is denied, a reason will be
provided. A copy of the request and response must be sent to the Code of Conduct
Administrator and the Human Resources Department to be filed in the employee's
personnel file, with copies to the employee's Department Director (or next
higher level officer), the employee's Executive Vice President, and the Amex
Office of General Counsel.

Management should endeavor to process requests within two weeks of the employee
submitting the request. However, failure to act within this time frame does not
constitute implicit approval, and an employee may not begin a political campaign
or accept a political appointment until he has received written approval from
the employee's Chief Executive Officer.

OFFICER OR DIRECTOR OF A PUBLICLY-TRADED COMPANY

An employee who wants to serve as an officer or a director for a publicly-traded
company must submit a written request to his Department Director (or next higher
level officer) prior to accepting position. The Department Director (or next
higher level officer) must ensure the request includes all necessary information
( i.e., a description of the office being sought and the duties of that office,
and whether the office has any securities-related authority) and must determine
whether the proposed activity will create any actual or potential conflict of
interest with the employee's duties to Amex. The Department Director (or next
higher level officer) must then send the request, information regarding any
actual or potential conflicts of interest and a recommendation to approve or
deny the request to the employee's Executive Vice President. The Department
Director may not approve or deny the request.

The Executive Vice President will review the information submitted by the
employee's Department Director (or next higher level officer) and obtain any
additional information that he deems necessary. The Executive Vice President
will then forward the request, all pertinent information and a recommendation to
approve or deny the request to the employee's Chief Executive Officer. The
recommendation made by the Executive Vice President may be different from the
initial recommendation made by the employee's Department Director (or next
higher level officer). The Executive Vice President may not approve or deny the
request.



The employee's Chief Executive Officer will review the information submitted by
the employee's Executive Vice President and obtain any additional information
that he deems necessary.

If the request relates to a position with an issuer that has securities listed
on Amex, the Chief Executive Officer will forward the request, all pertinent
information and a recommendation to approve or deny the request to the Audit
Committee. The recommendation made by the Chief Executive Officer may be
different from the recommendations made by the employee's Department Director
(or next higher level officer) and Executive Vice President. The Chief Executive
Officer may not approve or deny the request. The Audit Committee will review the
information submitted by the Chief Executive Officer and will make a decision
regarding the request, which may be different from the recommendation made by
management. The decision of the Audit Committee will be final.

If the request relates to a position with an issuer that does not have any
securities listed on Amex, the Chief Executive Officer will make a decision
regarding the request, which may be different from the recommendation made by
the employee's Executive Vice President and/or Department Director (or next
higher level officer). The decision of the Chief Executive Officer will be
final. Generally, any proposed activity that would create a conflict of interest
or prevent an employee from fulfilling his job duties with Amex will be denied.

The Chief Executive Officer (or Corporate Secretary on behalf of the Audit
Committee) will provide a written response either approving or denying the
employee's request. If the request is denied, a reason will be provided. A copy
of the request and response must be sent to the Code of Conduct Administrator
and the Human Resources Department to be filed in the employee's personnel file,
with copies to the employee, his Department Director (or next higher level
officer), the employee's Executive Vice President, and the Amex Office of
General Counsel.

Management should endeavor to process requests within two weeks of the employee
submitting the request. However, failure to act within this time frame does not
constitute implicit approval, and an employee may not begin a political campaign
or accept a political appointment until he has received written approval from
the employee's Chief Executive Officer.

OUTSIDE EMPLOYMENT

An employee must provide written notification to his Department Director (or
next higher level officer) if he wants to have employment in addition to his
employment with Amex. The Department Director (or next higher level officer)
should ensure the notice contains all required information. The Department
Director (or next higher level officer) must determine whether the outside
employment is prohibited by Code of Conduct Section VII.B. If so, within two
weeks the Department Director (or next higher level officer) must provide
written notification to the employee that he must cease the outside employment
or obtain a waiver from his Executive Vice President.

Generally, outside employment not prohibited in Section VII.B of the Code of
Conduct, will be presumed to be allowed under the Code of Conduct and no action
is required by the Department Director (or next higher level officer). However,
if the Department Director (or next higher level officer) believes an employee's
outside employment (although not specifically prohibited by Section VII. B),
presents a conflict of interest with the employee's Amex duties, within two
weeks the Department Director (or next higher level officer) must notify the
employee in writing that he must cease the outside employment or obtain a waiver
from his Executive Vice



President. The notification must provide the reason(s) for denying the proposed
outside employment. A copy of the Department Director's (or next higher level
officer's) notification must be sent to the Code of Conduct Administrator and
the Human Resources Department (to be placed in the employee's personnel file)
and the employee.

              VIII. SECURITY ACCOUNTS, POSITIONS, AND TRANSACTIONS

A.   RELEVANT DEFINITIONS

SECURITY ACCOUNT means any account maintained with a broker/dealer or commodity
futures merchant.

SECURITY POSITION means any debt or equity security, option, and other
derivative product.

SECURITY TRANSACTION means: 1) any transaction in a security account; or 2) the
creation, modification, or termination of a security position.

B.   GENERAL PROVISIONS

As a self-regulatory organization and market operator, the interests of Amex
require that employees' investment activities be free from any appearance of
having been based on non-public or other information gained through employment
with Amex. Further, these interests require that work performed for Amex is
neither influenced, nor perceived to be influenced, by an employee's security
positions or the location of his accounts. It constitutes a conflict of interest
for any employee to participate in an examination, investigation, disciplinary
action, listing decision, or other regulatory matter ( e.g., advertising
reviews, trading halts) related to the issuer of any security (including mutual
funds) in which he maintains an ownership interest, controls trading, or has a
financial interest.

C.   DISCLOSURE OF SECURITY ACCOUNTS, POSITIONS, AND TRANSACTIONS

To help ensure the interests of Amex are not compromised, each employee is
required to disclose the security accounts, positions, and transactions
described below. Disclosure is to be made as specified by the "Amex Code of
Conduct General Procedures."

     1.   All security accounts established by the employee.

     2.   All security accounts in which an employee has a financial interest,
          including but not limited to, investment clubs, joint accounts,
          trusts, and private corporations controlled by the employee. Employees
          are presumed to have a financial interest in the accounts of a spouse
          who lives with the employee. This presumption may be rebutted if the
          employee demonstrates the contrary by clear and convincing evidence;
          the determination of whether an employee has satisfied this burden
          will be made by the General Counsel of Amex, and will be final and
          binding on the employee.

     3.   All security accounts in which an employee may effect transactions
          either directly or indirectly, including transactions effected for the
          accounts of other persons under a power of attorney or otherwise.
          Employees are presumed to control trading in the accounts of any child
          under the age of 18 who lives with the employee. This presumption may
          be rebutted if the employee demonstrates the contrary by clear




          and convincing evidence; the determination of whether an employee has
          satisfied this burden will be made by the General Counsel of Amex, and
          will be final and binding on the employee.

     4.   All security positions held outside a brokerage account that the
          employee directly or indirectly controls or in which he has a
          financial interest. Employees are presumed to control the positions of
          any child under the age of 18 who lives with the employee, and to have
          a financial interest in the positions of a spouse who lives with the
          employee. These presumptions may be rebutted if the employee
          demonstrates the contrary by clear and convincing evidence; the
          determination of whether an employee has satisfied this burden will be
          made by the General Counsel of Amex, and will be final and binding on
          the employee. Security positions held outside brokerage accounts
          include securities held in certificate form, or securities acquired
          through a dividend reinvestment plan and held in book-entry form by
          the issuer.

     5.   All security transactions effected in any security accounts or
          security positions that are required to be disclosed in Section VIII
          C.1. through C.4., above.

D.   The disclosures required by Subsection C are not required for:

     1.   Mutual fund accounts that are maintained directly with the fund
          distributors.

     2.   Variable annuities sold directly by an insurance company.

     3.   Defined contribution savings plans ( e.g., Amex Savings Plus Plan, and
          other 401(k) plans) for which the only investment options are mutual
          funds or similar pooled funds whose investment decisions the employee
          cannot control.

     4.   Accounts maintained by the U.S. Treasury to enable investors to
          purchase U.S. Government securities directly from the issuing agency (
          e.g., "Treasury Direct" accounts).

E.   TRADING RESTRICTIONS

It is impermissible for employees, either directly or through security accounts
or security positions in which they control trading or have a financial
interest, to:

     1.   Purchase, sell, or recommend the purchase or sale of any security
          based on non-public information obtained through Amex employment.

     2.   Purchase or maintain any debt or equity interest in any broker/dealer,
          which is an Amex member, exchange other than that which employs the
          employee, contract market other than that which employs the employee,
          regulatory client of Amex, alternative trading system, or electronic
          communications network.

     3.   Purchase or maintain any debt or equity interest in any entity which
          derives more than 25% of its gross revenues (based upon the most
          recent consolidated audited annual financial statements) from the
          combined broker/dealer activities of all of its subsidiaries and
          affiliates. For purposes of this subsection, the term "broker/dealer
          activities" includes the operation of a security exchange, contract
          market, alternative trading system, or electronic communications
          network.

     4.   If an ownership interest that is impermissible under Sections VIII.E.2
          or VIII.E.3 results from a spin-off, merger, other business
          reorganization, or change in


          business activities, the employee is required to dispose of the
          impermissible security within 90 calendar days of the date on which
          Amex added the security to the Prohibited Company List and notified
          employees that the Prohibited Company List had been updated. If an
          impermissible interest results from life events such as inheritance or
          marriage, the employee is required to dispose of the interest within
          90 calendar days of acquiring the interest. If an impermissible
          interest arises from an employee's receiving authority to execute
          transactions in an account, the employee is required to dispose of the
          security within 90 calendar days of acquiring trading authority.

     5.   Knowingly purchase or sell a security at a price, commission, or
          mark-up (down) that is more favorable than the price, commission, or
          mark-up (down) afforded a similarly situated member of the general
          public in the normal course of business.

     6.   Purchase any security during its initial public offering or
          distribution. This prohibition does not apply to:

          a.   offerings of open-end mutual funds, unit investment trusts, U.S.
               government securities, municipal debt securities, or variable
               contracts; and

          b.   rights offerings, or securities issued as a result of spin-offs,
               mergers, and other business reorganizations if both of the
               following conditions are met:

               i.   an interest in the issuing entity (or its predecessor) was
                    owned prior to the public announcement of the offering or
                    reorganization; and

               ii.  new securities are acquired in a percentage amount that is
                    equal to or less than the interest that existed at the time
                    the offering or distribution was announced.

F.   ADDITIONAL TRADING RESTRICTIONS APPLICABLE TO CERTAIN EMPLOYEES

All employees are subject to the federal securities laws, which prohibit insider
trading. It is thus unlawful for any employee to trade on material non-public
information. Employees who work in certain departments that regularly receive
market-sensitive information are subject to additional trading restrictions.
These additional restrictions apply to otherwise lawful transactions.

Employees who work in specified departments (specified in the Code of Conduct
Interpretations, Section VIII) are required to hold securities for 90 days. The
holding period applies to employees' own security accounts and positions, and to
security accounts and positions in which they control trading or have a
financial interest. During the holding period, an employee may not sell,
purchase, exercise or otherwise dispose of his interest in a security, whether
directly or indirectly ( e.g., through the use of an offsetting derivative
position).

In addition, employees who work in the above-described departments (specified in
the Code of Conduct Interpretations, Section VIII) are prohibited from directly
or indirectly maintaining a net short position in certain securities that are
traded on markets operated by Amex without the prior written approval of his
Executive Vice President. The net-short prohibition applies to employees' own
security accounts and positions, and to security accounts and positions in which
they control trading or have a financial interest. This prohibition applies to
Amex-listed securities enumerated in the Code of Conduct Interpretations,
Section VIII, and to derivatives of those securities.



Further, employees who have futures-related regulatory responsibilities may be
subject to rules of the Commodity Futures Trading Commission and/or individual
contract markets that limit, or completely prohibit, futures trading. The
applicability of these rules is discussed in the Code of Conduct
Interpretations, Section VIII.

G.   LIQUIDATION OF PROHIBITED INVESTMENTS

     1.   Except as provided by Section VIII.E.4, if an employee acquires,
          controls, or derives a financial benefit from a security position that
          is prohibited by the Code of Conduct, Amex will require the security
          position to be immediately liquidated. The employee will be
          responsible for any losses that result from such disposition, and will
          be required to forfeit any resulting profits to the corporate entity
          for which the employee works. If warranted by the facts and
          circumstances surrounding a violation, additional disciplinary actions
          may be imposed against the employee, including immediate termination
          of employment.

     2.   If at the time of hire an employee, or an account in which he controls
          trading or has a financial interest, holds a security that is
          prohibited by the Code of Conduct, it is the employee's responsibility
          to liquidate the holding immediately. If a new employee believes that
          immediate liquidation would cause an undue hardship under his
          circumstances, it is the employee's responsibility to promptly seek a
          waiver from his Executive Vice President.

LISTED BELOW ARE INTERPRETATIONS AND PROCEDURES RELATING TO THE ABOVE SECTION.

                          SECTION VIII INTERPRETATIONS

1.   QUESTION: Employee A maintains an Amex Savings Plus Plan account. What are
     Employee A's reporting obligations under the Code of Conduct?

     ANSWER: None. The account does not have to be reported on the Security
     Account Disclosure Form and duplicate account activity statements do not
     have to be provided.

2.   QUESTION: Employee A wants to participate in the Standard and Poor's
     Depository Receipts(R) and/or Nasdaq 100 Index Tracking Stock(R) Employee
     Purchase Plans, which permit him to purchase shares of SPDRs(R) or Nasdaq
     100(R) Index on an after-tax basis through payroll deductions.
     Computershare administers the Plans, and thus A would have an account with
     that broker/dealer if he participates in the Plan. Must the Plan account be
     disclosed as a security account and must A arrange for duplicate account
     statements to be sent to the Amex Office of General Counsel?

     ANSWER: Although participation in the Plans involves opening an account at
     Computershare, such Plan accounts need not be disclosed and duplicate
     account statements need not be supplied under the Code of Conduct because:
     1) Computershare is simply acting as administrator of the Plans; and 2) the
     Plan accounts are established for a single purpose - buying or selling
     shares of SPDRs or Nasdaq 100 - and cannot be used to effect transactions
     in any other security.

3.   QUESTION: Under Section VIII.D.1., mutual fund accounts that are maintained
     directly with a mutual fund issuer do not need be disclosed by employees.
     How are such accounts differentiated from security accounts that do have to
     be disclosed?



     ANSWER: In a mutual fund account, the investor can buy only one type of
     instrument: mutual fund shares. The investor has no control over the
     securities that are bought and sold for the fund's portfolio. These
     decisions are made by the fund's management.

     By contrast, in security accounts with a broker, the investor/employee can
     purchase a variety of financial instruments. Such instruments may include
     mutual funds, but also individual stocks, municipal bonds, T-bills, etc.

     Under the Code of Conduct, mutual fund accounts are exempt from disclosure
     only if they are maintained directly with the mutual fund issuer. Employees
     are required to disclose all brokerage accounts, even if the accounts
     currently hold only mutual funds (rationale: the brokerage account can be
     used to buy/sell individual securities).

4.   QUESTION: Employee A maintains a self-directed IRA account, which is
     invested solely in mutual funds at a brokerage firm. What are Employee A's
     reporting obligations under the Code of Conduct?

     ANSWER: Should he choose to do so, Employee A could purchase securities
     other than mutual funds through this account. Therefore, the account must
     be reported on the Security Account Disclosure Form, and duplicate account
     activity statements must be provided.

5.   QUESTION: Employee A and his wife maintain a joint account in the ABCD
     mutual fund maintained by the Alphabet Fund Group. What are Employee A's
     reporting obligations under the Code of Conduct?

     ANSWER: None. The account can only purchase mutual funds, therefore it does
     not have to be reported on the Security Account Disclosure Form and
     duplicate account activity statements do not have to be provided.

6.   QUESTION: Employee A and his wife maintain a joint account at broker/dealer
     Z so they can invest in local municipal bonds. What are Employee A's
     reporting obligations under the Code of Conduct?

     ANSWER: The account must be reported on the Security Account Disclosure
     Form and duplicate account activity statements must be provided.

7.   QUESTION: Employee A's parents have an account at broker/dealer Z, through
     which they invest in various stocks and bonds. Employee A's parents support
     themselves and do not live with Employee A, but Employee A ultimately
     expects to inherit his parents' assets. What are Employee A's reporting
     obligations under the Code of Conduct?

     ANSWER: None. While Employee A may ultimately inherit his parents' assets,
     including the securities in the account, he currently does not derive a
     financial benefit from the account or control the trading in the account.

8.   QUESTION: Employee A's parents, who are in their 60's, have executed a
     power of attorney authorizing A to act on their behalf in the event that
     they become disabled. The power of attorney specifically authorizes A,
     among other things, to act for them with respect to stock and bond
     transactions. Thus, if A's parents became unable to manage their affairs, A
     would be authorized to assume control over his parents' security accounts
     and positions. At present, A's parents are healthy and able to manage their
     affairs, and therefore A has had no occasion to buy or sell securities on
     their behalf. Is A required to disclose his parents' security accounts and
     arrange for duplicate account statements to be sent to Amex?

     ANSWER: In the circumstances described, A need only send an e-mail
     notification to the Amex Office of General Counsel advising that he holds
     the power of attorney and, in the event that his parents



     become disabled and he begins exercising control over their security
     accounts or positions, he will promptly ( i.e., within seven days of making
     his first transaction involving any of his parents' security accounts or
     positions): 1) report the security accounts using the Security Account
     Entry Form provided on Amex Central; 2) report any security positions
     maintained outside a brokerage account using the Securities Held Outside
     B/D Accounts Entry Form provided on Amex Central; and 3) instruct his
     parents' broker/dealers to send duplicate account statements to Amex. The
     e-mail need not identify the account numbers or broker/dealers where the
     parents' accounts are maintained. Nor is it necessary to identify any
     securities that the parents hold outside a brokerage account.

     This abbreviated form of disclosure is permitted under A's circumstances
     given that he currently does not effect on behalf of his parents, and
     cannot to do so unless his parents become disabled. Allowing employees in
     A's position to provide abbreviated disclosure is intended both to avoid
     imposing an undue hardship on A and his parents ( i.e., discouraging A's
     parents from engaging in prudent financial planning due to privacy
     concerns) and to serve Amex's interests ( i.e., avoiding processing large
     numbers of account statements for accounts in which employees neither have
     an interest nor control trading).

     It should be noted that the abbreviated reporting described above is NOT
     permitted when an employee currently exercises trading authority for his
     parents pursuant to a power of attorney. In such cases, the employee must
     disclose his parents' security accounts using the Security Account Entry
     Form and any security positions maintained outside brokerage accounts
     (e.g., securities held in certificate form in a safe deposit box) using the
     Securities Held Outside B/D Accounts Entry Form. In addition, the employee
     would be required to instruct the broker/dealers where his parents have
     accounts to send duplicate statements to Amex.

9.   QUESTION: Employees A and B belong to an investment club with four
     non-employees. The club invests in a variety of stocks. What are Employee A
     and B's reporting obligations under the Code of Conduct?

     ANSWER: Employees A and B each have a financial interest in the account.
     Therefore the account must be reported by each employee on the Security
     Account Disclosure Form and duplicate account activity statements must be
     provided. In addition, since the club is bound by the same investment
     restrictions that apply to A and B, A and B should ensure that members of
     the club are aware of these restrictions.

10.  QUESTION: Newly-hired employee A owns stock in his former employer, a
     broker/dealer. Under the Code of Conduct, must he sell the stock?

     ANSWER: Employees are prohibited from owning stock in a brokerage firm,
     which is a member of the Amex. However, if the immediate disposition of the
     stock by a newly-hired employee poses an undue hardship, he may request a
     waiver from his Executive Vice President. Such a waiver request could seek
     additional time in which to liquidate the position ( e.g., 90 or 180 days).
     Alternatively, the waiver request could seek permission to maintain, but
     not add to, the position. If the Executive Vice President grants a waiver,
     it should specify all relevant conditions ( e.g., the deadline by which
     position is to be liquidated; prohibition against additional purchases;
     requiring prior notification of any sales; and a plan for disposing of the
     stock).

     Whenever possible, circumstances such as A's, terms of the waiver, should
     be covered as part of pre-employment interviews and negotiations.

11.  QUESTION: Employee A owns stock in XYZ Corp., a holding company that owns
     several other companies conducting diverse businesses. One of the
     companies, PQR Corp. is a broker/dealer. XYZ has no other subsidiaries
     engaged in an investments-related and Amex member business.



     Based on the last audited annual report, PQR generates 17% of the XYZ's
     gross revenues. What is the impact of the Code of Conduct on Employee A?

     ANSWER: At present, this is not a prohibited position since PQR accounts
     for less than 25% of XYZ's gross revenue. In the event that PQR later
     crosses this 25% threshold, Employee would be required to sell the XYZ
     stock, or seek a waiver from his Executive Vice President. Employee A
     should review XYZ's audited annual report to ensure PQR's revenue remain
     below the 25% threshold, and consult the Prohibited Company List posted on
     Amex Central.

12.  QUESTION: Same facts as above. Employee A has maintained his position in
     XYZ Corp. for several years, during which time PQR's revenues have never
     exceeded 25% of XYZ's gross revenues. XYZ Corp. has now decided to spin-off
     PQR Corp. as a separately traded public corporation. As a result, each
     shareholder in XYZ Corp. will receive one share of new PQR Corp. stock for
     each share of XYZ Corp. owned. What is the impact of the Code of Conduct on
     Employee A with regard to the re-organization?

     ANSWER: Employees are not allowed to purchase or own stock in a
     broker/dealer. Which is a member of the Amex. When PQR is spun-off, it will
     become a separate corporation. Because PQR is a broker/dealer and an Amex
     member, Employee A will have 90 days after the stock starts trading to
     dispose of the stock.

13.  QUESTION: Employee A's wife (B) has an opportunity to purchase stock in her
     employer, at a discount, through payroll deductions and the employer's
     discount stock purchase program. Is this permitted under the Code of
     Conduct?

     ANSWER: Employees are prohibited from purchasing a security at a price more
     favorable than that available to a similarly situated member of the general
     public. However, in this case B would be permitted to purchase her
     employer's discounted stock because it is a price available to other
     "similarly situated" members of the public (i.e., other employees of B's
     employer) without regard to A's status as an Amex employee.

14.  QUESTION: Who is subject to the 90-day holding period and net short
     prohibition described in Section VIII?

     ANSWER: The chart below summarizes the departments and securities that are
     subject to these provisions. As indicated, the restrictions on departments
     or staff in Group I are far more extensive than those that apply to
     departments and staff in Group II.

--------------------------------------------------------------------------------

GROUP I (DEPARTMENTS/STAFF SUBJECT TO BROADEST RESTRICTIONS)

--------------------------------------------------------------------------------

AMEX DEPARTMENTS AND STAFF AFFECTED
-----------------------------------

o    Listing Qualifications - management and staff;

o    Division of Regulation and Compliance - management and staff (excludes
     Membership and Registration; Trading Data Services and Library)

o    Equities, Sales and Issuer Services - management and staff

o    Executive Administration/Office of the Chairman - management and staff.

Securities Affected: securities of any issuer listed (or pending listing) on
Amex.

--------------------------------------------------------------------------------



          GROUP II (DEPARTMENTS/STAFF SUBJECT TO NARROWER RESTRICTIONS)

--------------------------------------------------------------------------------

AMEX DEPARTMENTS AND STAFF AFFECTED

--------------------------------------------------------------------------------

o    Capital Markets - management and staff;

o    New Product Development - management and staff

o    ETF Marketplace - management and staff

Securities Affected: securities of: a) any issuer with which an employee has had
contact or has been assigned responsibility during the 90 days prior to the
initial purchase of the issuer's securities; and b) any issuer currently
contained in plans for a targeted marketing effort for which the employee will
be responsible during the coming 12 months.

While the Group I Report identifies apparent violations, the 90-Day Holding
Report (Group II) merely lists purchases and sales of the same security (listed
on any market) within 90 days by Amex employees with listing-related
responsibilities. Since these employees are only subject to holding requirements
for issuers as to which they have work-related responsibilities, the 90-Day
Holding Report (Group II) should be treated as a routine screening report. The
review and record-keeping practices for screening reports are discussed above
under "Security Accounts and Positions - Routine Monitoring."

--------------------------------------------------------------------------------

15.  QUESTION: Are all of an issuer's securities investments, including options,
     subject to the holding period and net short prohibition?

     ANSWER: These provisions apply to all securities and any derivative of
     specific security. The provision does not apply to broad-based derivative
     securities (such as S&P 500(R) Index or Nasdaq-100 Index (R) option or
     warrant) in which the issuer's securities are a component.

16.  QUESTION: How is the 90-day holding period calculated for an employee who
     makes multiple purchases or sales of the same security on different days?

     ANSWER: The 90-day period will be calculated on a "First-In, First-Out"
     basis, running from the date of each purchase or sale of each security.

17.  QUESTION: Employee A buys 500 shares of WXYZ stock on 1/1/XX, 300 shares on
     2/1/XX, and sells 200 shares on 4/15/XX. Has he violated the holding
     period?

     ANSWER: No. It is presumed that the 400 shares sold came from the 1/1/XX
     purchase. Therefore, those shares were held 105 days at the time of sale.

18.  QUESTION: Employee A buys 500 shares of WXYZ stock on 1/1/XX, 300 shares on
     2/1/XX, and sells 700 shares on 4/15/XX. Has he violated the holding
     period?

     ANSWER: Yes. The sale was for all of the shares that were no longer subject
     to the 90-hold period, plus 200 shares that were subject to the 90-hold
     period until 5/1/XX.

19.  QUESTION: Can an employee, who is subject to the 90-day holding period
     requirement, hedge his securities position prior to the expiration of the
     holding period?

     ANSWER: If an employee wants to hedge a position that is subject to the
     90-day holding, he can do so only by entering into a "stop loss order" on
     the date he purchases the security. Any other form of hedging could present
     a situation in which the employee could be forced into a violation of the
     "no net short" requirement, which he is also subject to, or create the
     opportunity to circumvent the intent of the holding period.

20.  QUESTION: If an employee enters a stop-loss order that is triggered prior
     to the expiration of a holding period, is this a violation of the Code of
     Conduct?




     ANSWER: If, pursuant to a stop-loss order, securities are sold prior to the
     expiration of the holding period, it will not be deemed to be a violation
     of the Code of Conduct provided that the stop-loss order was entered at the
     same time as the securities purchased. If the stop-loss was entered
     subsequently, then the position must be held the full 90 days.

21.  QUESTION: What is the effect of the 90-day holding period on options or
     futures purchases and sales?

     ANSWER: If not restricted, derivatives could be used to circumvent the
     90-day holding period and therefore these products are subject to a 90-day
     holding period. This means that, effectively, employees subject to the
     holding period may only purchase derivative contracts on a specific
     security if there are 90 days or more remaining until the expiration of the
     derivative. The employee may not exercise or liquidate the derivative
     position prior to the expiration of the 90-day holding period.

     These limitations on derivatives trading relate only to derivatives on
     specific securities and do not apply to broad-based derivative products (
     i.e., options or futures based on an index such as the Nasdaq 100 or S&P
     500). Employees who are considering a narrowly based derivative product
     that includes a security subject to the Code's holding period/net short
     provisions should consult with the Amex Office of General Counsel .

22.  QUESTION: Employee A works in a department subject to the "no net short
     position" requirements and maintains an account at broker/dealer Z. He has
     purchased 500 shares of MNOP Corp. stock and 10 standardized calls on MNOP
     Corp. stock. Employee A also maintains a joint account with his wife (B) at
     broker/dealer Y in which they have sold 18 standardized calls on MNOP Corp.
     stock. MNOP Corp. stock is listed on Nasdaq. Is employee A in compliance
     with the Code of Conduct?

     ANSWER: The Code of Conduct prohibits employees in the departments
     specified above, from purchasing or maintaining a net short position in any
     Amex security. The positions in all of the accounts in which employee A has
     an interest net to a 300 share short position |500 shares +10 calls -18
     calls = -300 shares|. Therefore Employee A has violated the Code of
     Conduct.

                         SECTION VIII GENERAL PROCEDURES

FOLLOW THESE LINKS TO:

     o    Amend or review your securities accounts Security Account Entry Form

     o    Amend or review the securities you hold outside brokerage accounts
          Securities Held Outside B/D Accounts Entry Form

     o    Report or review business gifts and courtesies you have previously
          reported Business Gift and Courtesy Entry Form

     o    Obtain a form that you can use to instruct your broker/dealer to send
          duplicate account activity statements to Amex Request for Duplicate
          Statements

DISCLOSURE OF SECURITY ACCOUNTS AND POSITIONS; DUPLICATE ACCOUNT STATEMENTS

Employees are required to disclose all security accounts and positions that they
maintain, as well as security accounts and positions in which employees have an
interest or control trading. Except as provided below under "Special Provision
Relating to Certain Powers of Attorney," disclosure is performed on-line, via
Amex Central, using the Security Account Entry Form, and the Securities Held
Outside B/D Accounts Entry Form. New employees are allowed 30 days in which to
complete their initial disclosures. All other employees are allowed seven days
in which to report that they have created or closed a reportable account or
position.




Whenever an account must be disclosed, the employee must arrange for the
broker/dealer or commodity futures merchant at which the account is maintained
to send duplicate account statements to Amex. Statements for Amex employees
should be sent to:

Code of Conduct Administrator
American Stock Exchange LLC
Office of General Counsel
86 Trinity Place, 12th floor
New York, New York 10006

All security positions must be disclosed, regardless of whether they are
maintained in a brokerage account. Thus, for example, stock certificates that
are kept in a safe deposit box, or securities purchased through dividend
reinvestment plans and maintained in book-entry form with the issuer must be
disclosed in writing. Such positions are disclosed on the Securities Held
Outside B/D Accounts Entry Form.

In addition, employees should note that maintaining an account with a
broker/dealer is presumed to create a conflict of interest that interferes with
an employee's ability to conduct Amex business with that firm and owning stock
in an issuer is presumed to create a conflict of interest that interferes with
an employee's ability to conduct Amex business with that issuer. Therefore,
employees are required to disclose such presumptive conflicts to their
Department Director (or next higher-level officer). In appropriate
circumstances, an Executive Vice President may grant a waiver to permit an
employee to work on a matter involving a broker/dealer at which an employee
maintains an account, or an issuer whose stock an employee owns.

New Accounts/Holdings

Whenever new accounts or positions that are required to be disclosed under the
Code of Conduct are established, the employee must disclose the new account or
position within a week. The necessary disclosure is made on-line, via Amex
Central, using the Security Account Entry Form or the Securities Held Outside
B/D Accounts Entry Form.

Managed Accounts

If an employee has an account that is managed by an investment adviser or
broker/dealer, or if an employee has an interest in such an account, the
employee is liable for any prohibited activity that occurs in the account and,
in the event a prohibited transaction is effected, may be subject to
disciplinary action. Therefore, employees are strongly urged to provide copies
of Section VIII of the Code of Conduct, the Prohibited Company List, and the
Watch List to anyone who has been given discretionary or other trading authority
over accounts that the employee maintains, or accounts in which an employee has
an interest.

Blind Trusts

If an employee opens, maintains, or has an interest in a blind trust through
which securities transactions are effected, duplicate account statements need
not be submitted to the Amex Office of General Counsel. Instead, the employee
will be required to: (i) provide a copy of the trust agreement or other
documentation used to establish the blind nature of the trust; and (ii) instruct
the trustee to confirm in writing to the Amex Office of General Counsel that:
(a) any securities initially deposited into the trust have been liquidated or
otherwise disposed of; (b) the



proceeds have been reinvested in a manner not known by the employee (or other
beneficiaries); and (c) the trustee will continue to refrain from disclosing to
the employee (or other beneficiaries) the identity of any investments made in
the trust.

Closing Security Accounts

Whenever a reportable account is closed, the employee must report this fact
within one week. The account closing is reported on-line, via Amex Central,
using the Security Account Entry Form.

Changes in Security Positions Outside Brokerage Accounts

If a reportable holding is acquired, or a previously reported holding is
eliminated, the employee is required to report this fact within one week. The
required reporting is done on-line, via Amex Central, using the Securities Held
Outside B/D Accounts Entry Form. Employees should be aware that completion of
this form is required only when a holding in initially established or fully
eliminated (e.g., going from 0 shares of ABCD Corp. to 100 shares, or vice
versa).

Note that the above paragraph only relates to securities that are held outside a
broker/dealer account.

Annual Reporting

Each employee is responsible for ensuring that, once each year, he recertifies
his compliance with the Code of Conduct and updates his disclosures of security
accounts and holdings. These tasks are performed on-line, via Amex Central,
using the Code of Conduct Certification Entry Form

Special Provision Relating to Certain Powers of Attorney

As a routine part of their financial planning, individuals are encouraged to
execute powers of attorney authorizing someone to handle their affairs in the
event that they become disabled. For example, senior citizens often wish to
authorize an adult child to act on their behalf in the event of disability.
However, privacy concerns might deter the elderly parent of an Amex employee
from executing a power of attorney if this would require the Amex employee to
disclose the parent's brokerage accounts and arrange for the Amex to receive
duplicate account statements.

In order to avoid deterring prudent financial planning, abbreviated disclosure
of an account/security may be provided when an employee's authority to trade the
account/security flows from a power of attorney and the resulting trading
authority either: 1) can be exercised only if the grantor becomes disabled (
i.e., the power of attorney becomes effective only if the grantor becomes
disabled); or 2) is currently effective but was intended for use only in the
event of the grantor's disability and therefore has gone unexercised ( e.g., a
power of attorney that survives the grantor's disability). In these limited
circumstances, the Amex employee need only send an e-mail notification to the
Amex Office of General Counsel advising that he holds the power of attorney and,
in the event that he begins exercising trading authority over the grantor's
security accounts or positions, he will promptly  i.e., within seven days of
making his first transaction involving any of the grantor's security accounts or
positions): 1) report the security accounts using the Security Account Entry
Form provided on Amex Central; 2) report any security position maintained
outside a brokerage account using the Securities Held Outside B/D



Accounts Entry Form provided on Amex Central; and 3) instruct the grantor's
broker/dealers to send duplicate account statements to the Amex. The e-mail need
not identify the account numbers or broker/dealers where the grantor's accounts
are maintained. Nor is it necessary to identify any securities that the grantor
holds outside a brokerage account.

This abbreviated form of disclosure is permitted only when an employee currently
does not effect securities transactions on behalf of the grantor. Abbreviated
reporting is not permitted when an employee currently exercises trading
authority pursuant to a power of attorney. When an employee exercises such
authority, he must disclose the grantor's security accounts using the Security
Account Entry Form and any security positions maintained outside brokerage
accounts (e.g., securities held in certificate form in a safe deposit box) using
the Securities Held Outside B/D Accounts Entry Form. In addition, the employee
is required to instruct the broker/dealers where the grantor maintains the
accounts in which the employee exercises trading authority to send duplicate
statements to the Amex

                       SECTION VIII SUPERVISORY PROCEDURES

Security Accounts and Positions -- Routine Monitoring

Each Department Director (or next higher level officer) has access to
information that the employees within his department have reported regarding
their security accounts and positions. Information is available on-line, via
Amex Central, through three reports that are part of the Code of Conduct
Compliance System (CCCS):

     o    Security Account Information Report (identifies broker/dealers at
          which employees have reported maintaining accounts);

     o    Holdings in B/D Accounts Report (lists securities that employees hold
          in brokerage accounts);

     o    Holdings Outside B/D Accounts Report (lists securities that employees
          have reported holding outside brokerage accounts - e.g., stock
          certificates kept in a safe deposit box).

Department heads are able to generate the above reports whenever they wish by
clicking on the links above. Department heads should generate and review the
reports once each quarter.

Because these reports are used for routine monitoring, department heads may
review them on-screen; there is no need to print hard copies unless a department
head detects potentially violative conduct. If no potentially violative conduct
is identified during the on-screen review, the department head need only record
in his files the name of the report, the date on which he reviewed the report,
the period covered by the report, and the fact that no potential violations were
identified. *

However, if the department head identifies potentially violative conduct, (
e.g., a stock position that the department head, based on his knowledge of an
employee's work assignments, recognizes as a conflict of interest), a hard copy
of the report should be generated and the questionable items discussed with the
employees identified in the report. After the department head has resolved each
potentially violative incident reflected on the report, he should initial the
report and place it, along with any related memoranda, notes, or e-mail
messages, in his files. *




Department heads who identify violations of the Amex Code of Conduct are
required to report them to the General Counsel of Amex.

SECURITY ACCOUNTS AND POSITIONS -- EXCEPTION REPORTS

There are four types of CCCS exception reports:

IPO EXCEPTION REPORT (identifies employees who have purchased stocks as part of
an IPO allocation);

B/D STOCK REPORT (identifies employees who have purchased stocks of Amex member,
broker/dealers or entities that derive more than 25% of their revenues from the
activities of broker/dealer subsidiaries or affiliates);

MISSING STATEMENT REPORT (identifies brokerage accounts that an employee has
disclosed to Amex but for which the Amex has not received duplicate brokerage
statements);

90-DAY HOLDING REPORT GROUP I (identifies apparent holding violations involving
Amex stocks by employees in Amex Specified Departments. 1

These reports are generated on the basis of transaction data that Amex Office of
General Counsel obtains from duplicate account statements and enters into CCCS.
Because these reports can only be generated after data entry for a particular
calendar quarter is complete, department heads cannot generate them at will.
Instead, OGC generates the reports, which include an e-mail function that
forwards a URL to the department head of each employee identified on the report.
The department head uses the URL to open a report for his department(s).

For each of the four types of reports listed above, the department head should
print the report, review it, and discuss apparent violations with the identified
employees. The department head has 15 days in which to report back to Amex
Office of General Counsel on responsive actions taken. After the department head
has responded to each incident reflected on the report, he should initial a hard
copy of the report and place it (along with any related memoranda, notes, and
e-mail messages) in his files. The items should be retained for five years.

                 IX. BUSINESS GIFTS, GRATUITIES, AND COURTESIES

A.   Relevant Definitions

BUSINESS COURTESY means an item provided in conjunction with, and incidental to,
a meeting, seminar, or conference that an employee attends for the purpose of
conducting Amex business with the approval of his Department Director (or next
higher level officer).

BUSINESS GIFT means any item that is received from any Amex member, Amex issuer,
or any person with whom Amex transacts business.

BUSINESS GRATUITY means any favor or item received from any Amex member, Amex
issuer, or any person with whom Amex transacts business in return for a specific
service.

----------

* Since these records are generated in the course of an SRO activity, Exchange
Act Rule 17a-1 currently requires that they be retained for five years.



B.   General Provisions

     1.   Unsolicited non-cash business gifts or courtesies may be accepted only
          if the employee will not appear to be improperly influenced. Business
          gifts received may not exceed $100 in aggregate value from any person
          during a calendar year. Employees must report business gifts and
          courtesies they accept, as specified in the "Amex Code of Conduct
          General Procedures."

     2.   When conducting Amex business, employees generally should pay for
          incidental business expenses ( e.g., meals) and obtain reimbursement
          through the submission of a Travel and Entertainment Form to the Amex
          Finance Department. In some situations, it may not be possible or
          practical for an employee to pay for his own expenses, and the person
          with whom Amex is conducting business may pay for these items. In such
          circumstances, the employee is required to report the estimated value
          of the expenses paid by the third party as a business courtesy.
          Reporting is performed as specified in the "Amex Code of Conduct
          General Procedures." Any business courtesies accepted must be in
          furtherance of Amex business and, when reported, the business purpose
          must be specified.

C.   Specific Prohibitions

With respect to any Amex member, Amex issuer, or any person with whom Amex
transacts business, employees and members of their immediate families are
prohibited from directly or indirectly:

          1.   Soliciting any business gift, gratuity, or courtesy.

          2.   Accepting any business gratuity.

          3.   Accepting any business gift or courtesy consisting of cash, cash
               equivalents ( e.g., gift certificates), securities, or loans.

          4.   Accepting non-cash business gifts with an aggregate value in
               excess of $100 from any person per calendar year.

          5.   Accepting any business gift of tickets to a concert, theatrical
               performance, sporting event, or similar function.

          6.   Accepting any business gift or courtesy ( e.g., lunch, dinner,
               transportation, etc.) from any person or entity that is the
               subject of an investigative, adjudicatory, or disciplinary
               function in which the employee is involved.

          7.   Accepting any business gift or courtesy ( e.g., lunch, dinner,
               transportation, etc.) from an attorney or party to an
               arbitration, mediation, or other dispute-resolution proceeding in
               which an employee is involved.

D.   The provisions of Subsections B and C, above, do not apply if:

          1.   Circumstances make it clear that a personal or family
               relationship, rather than a business relationship, is the
               motivating factor behind a gift to an employee or a member of an
               employee's immediate family.

          2.   A business gift, gratuity, or courtesy was received by a member
               of the employee's immediate family in connection with that family
               member's employment or professional standing.



          3.   A discount or other promotional benefit is available to all
               employees through an Amex-sanctioned arrangement.

E.   Disposition of Impermissible Business Gifts, Gratuities, and Courtesies

If an employee or a member of his immediate family accepts a business gift,
courtesy, or gratuity that is prohibited by the Code of Conduct or which, in
fact or appearance, may improperly influence the employee in the performance of
his duties, the employee's Department Director (or next higher level officer)
may require the business gift, courtesy, or gratuity to be returned (or
otherwise disposed of), or require the employee to reimburse the donor for the
cost of the item. If warranted by the circumstances, additional disciplinary
actions may be imposed, up to or including immediate termination of employment.

                          SECTION IX GENERAL PROCEDURES

DISCLOSURE OF BUSINESS GIFTS AND COURTESIES RECEIVED

Employees must report most business gifts and courtesies they receive. However,
the following types of business gifts and courtesies need not be reported, and
business gifts described below are excluded for purposes of computing the $100
annual aggregate limit on business gifts from a single source.

     o    Modest items of food and refreshments such as soft drinks, coffee,
          bagels, sandwiches, or cookies having an aggregate value of less than
          $15.

     o    Advertising or promotional materials such as pens, pencils, note pads,
          calendars, and coffee mugs, received from a single source on a single
          occasion and having an aggregate value of less than $15.

To report an item, use the Business Gift and Business Courtesy Entry Form via
Amex Central.

Employees are required to report any business gift or courtesy received within
30 days of receipt. If the employee does not know the exact value of a business
gift or courtesy that he has received, he should provide his best estimate of
the value. This will normally be the retail value that the employee would have
paid for the item if he had purchased it for himself in an arm's-length
transaction. If a business courtesy is received, the employee must specify what
Amex business purpose was advanced by the employee's acceptance of the item.

Employees are expected to know what constitutes an acceptable business gift or
courtesy under the Code of Conduct. In some situations an employee may find he
has accepted, or is about to be presented with, a business gift or courtesy that
is excessive in value or otherwise not permitted by the Code of Conduct. In such
cases the employee must discuss the situation with his Department Director (or
next higher level officer), either before accepting the item or as soon as
practical thereafter. At that time, the Department Director (or next higher
level officer) may approve the acceptance of the item or, if the Department
Director (or next higher level officer) is not sure what the disposition of the
item should be, he should contact the Amex Office of General Counsel . When
reporting an exception item, employees must note the item was discussed and
orally approved by his Department Director (or next higher level officer).



                        SECTION IX SUPERVISORY PROCEDURES

REVIEW AND APPROVAL OF REPORTED BUSINESS GIFTS AND COURTESIES

A.   Quarterly Reporting

Each Department Director (or next higher level officer) has access to
information that the employees within his department have reported regarding
business gifts and courtesies. The information is available on-line, via Amex
Central, in the Business Gift and Courtesy Report section.

Department heads are able to generate this report whenever they wish, but should
generate and review the report at least once each quarter. In reviewing the
report, department heads should bear the following in mind:

     o    Employees are prohibited from accepting cash, cash equivalents (e.g.,
          gift certificates), securities, and loans.

     o    During a calendar year, an employee cannot accept from any person
          non-cash gifts with an aggregate value in excess of $100.

     o    Gifts of tickets ( e.g., to a theatrical performance, or sporting
          event) are prohibited.

In addition, the reports should be reviewed to ensure that:

     o    Employees have reported all reportable items of which a department
          head is aware.

     o    The business purpose recorded in connection with each business
          courtesy was in furtherance of Amex business.

     o    Employees did not accept any business gift or courtesy ( e.g., lunch,
          dinner, transportation) from any person or entity that is the subject
          of an investigative, adjudicatory, or disciplinary function in which
          the employees are involved.

     o    Employees did not accept any business gift or courtesy from an
          attorney or party involved in an arbitration, mediation, or other
          dispute-resolution proceeding in which the employees are involved.

     o    Employees have not accepted any items that appear to be excessive,
          raise the appearance of a conflict of interest, or appear otherwise to
          impede the employees' ability to act impartially.

Because the Business Gift and Courtesy Report is used for routine monitoring,
department heads may review it on-screen; there is no need to print a hard copy
unless a department head detects potentially violative conduct. If no
potentially violative conduct is identified during the on-screen review, the
department head need only record in his files the name of the report, the date
on which he reviewed the report, the period covered by the report, and the fact
that no potential violations were identified.

However, if the department head identifies potentially violative conduct, a hard
copy of the report should be generated and the questionable item(s) discussed
with the employee(s) identified in the report. After the department head has
resolved each potentially violative incident reflected on the report, he should
initial the report and place it, along with any related memoranda, notes, or
e-mail messages, in his files. *

All violations of the Code of Conduct must be reported to the General Counsel of
Amex.



*Since these records are generated in the course of an SRO activity, Exchange
Act Rule 17a-1 currently requires that they be retained for five years.

                  X. CODE OF CONDUCT ENFORCEMENT AND DISCIPLINE

A.   Investigations

Employees who are aware, or become aware, of unreported or undisclosed suspected
violations of the Code of Conduct by other employees are expected to report such
violations to the Office of General Counsel or to the Internal Audit section of
the Internal Review Department. Employees reporting alleged violations of the
Code of Conduct will be provided with confidentiality to the extent possible.
Failure to report violations may subject the non-reporting employee to
disciplinary action.

When suspected violations are reported or discovered, the Office of General
Counsel and the Internal Review Department will confer regarding the extent of
the investigation required. The Internal Review Department generally will
conduct any investigation determined necessary.

Employees are expected to cooperate fully with any investigation of possible
violations of the Code of Conduct. Failure to do so will be considered a
violation of the Code of Conduct and may subject the non-cooperating employee to
disciplinary action.

Investigative findings will be reported to appropriate management.

B.   Discipline

In the event that an employee is found to have violated the Code of Conduct,
appropriate sanctions will be imposed by management. In assessing sanctions, the
Amex aims to treat all employees fairly and consistently. To achieve these goals
with respect to disciplinary actions imposed for Code of Conduct violations,
management must consult with the Office of General Counsel whenever an employee
has violated the Code of Conduct. The Office of General Counsel will advise
management regarding past disciplinary actions that have been imposed under
similar circumstances. If management proposes an action that is inconsistent
with precedent or appears inappropriate, the Office of General Counsel may
require that more senior management agree with the proposed action.

                        SECTION X SUPERVISORY PROCEDURES

DISCIPLINARY ACTIONS

Management has ultimate responsibility for disciplinary sanctions imposed on the
employee for violations of the Code of Conduct. However, prior to taking any
disciplinary action for a violation of the Code of Conduct, or determining that
no disciplinary action is required for a violation of the Code of Conduct, the
General Counsel must be notified. Notification need not be in writing.

First Amendment
to Distribution Agreement
Dated September 29, 1997, effective November 1, 1997,
by and among
PDR Services Corporation, SPDR Trust, Series 1 and
ALPS Mutual Funds Services, Inc.

THIS AMENDMENT is made as of October 11, 2004, by and between PDR Services LLC, a Delaware limited liability company, formerly known as PDR Services Corporation, a Delaware corporation ("PDR"), SPDR Trust, Series 1, a unit investment trust organized under the laws of the State of New York (the "Trust"), and ALPS Distributors, Inc., formerly known as ALPS Mutual Funds Services, Inc., a Colorado corporation ("ADI").

WHEREAS, ADI, PDR, and the Trust entered into a Distribution Agreement (the "Agreement") dated September 29, 1997, effective November 1, 1997; and

WHEREAS, effective April 6, 1998, PDR, the sponsor of the Trust, changed its name and form of organization from PDR Services Corporation, a Delaware corporation, to PDR Services LLC, a Delaware limited liability company; and

WHEREAS, effective April 2, 2001, ADI, the distributor of the Trust, changed its name from ALPS Mutual Funds Services, Inc. to ALPS Distributors, Inc; and

WHEREAS, in light of the foregoing, ADI, PDR, and the Trust wish to modify the provisions of the Agreement to reflect the change in the names of PDR Services Corporation and ALPS Mutual Funds Services, Inc. to PDR Services LLC and ALPS Distributors, Inc., respectively;

NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:

1.	PDR Services LLC . All references to PDR Services Corporation within the Agreement shall be deleted and replaced with references to PDR Services LLC.

2.	ALPS Distributors, Inc . All references to ALPS Mutual Funds Services, Inc. within the Agreement shall be deleted and replaced with references to ALPS Distributors, Inc.

Miscellaneous . Other than as amended hereby, all terms and conditions of the Agreement are unchanged and remain in full force and effect. This Amendment shall be deemed to be an amendment to the Agreement and shall be governed by the laws of the State of New York. This Amendment may be simultaneously executed in several counterparts; each of which shall be an original and all of which shall constitute but one and the same instrument.

IN WITNESS WHEREOF, this Amendment has been executed by a duly authorized representative of each of the parties hereto as of the date of the Amendment first set forth above.


SPDR TRUST, SERIES 1				PDR SERVICES LLC
By:				By:
Name:				Name:
Title:				Title:
ALPS DISTRIBUTORS, INC.
By:
Name:
Title:

DISTRIBUTION AGREEMENT

DISTRIBUTION AGREEMENT (the "Agreement") made as of September 29, 1997, effective December 1, 1997, by and among PDR Services Corporation, a Delaware corporation (the "Sponsor"); SPDR Trust, Series 1, a unit investment trust organized under the laws of the State of New York (the "Trust"); and ALPS Mutual Funds Services, Inc., a Colorado corporation (the "Distributor")

W I T N E S S E T H :

WHEREAS, the Trust is governed by a trust agreement (the "Trust Agreement ^" ) between the Sponsor and State Street Bank and Trust Company, as trustee (the "Trustee") pursuant to which there will be created units of fractional undivided interest in the Trust referred to as Standard & Poor's Depositary Receipts ("SPDRs ^" ) and representing proportionate interests in the portfolio of securities and assets held by the Trust;

WHEREAS, the Sponsor and the Trust have filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-6 (Registration No. 33-46080), including as part thereof a prospectus (the "Prospectus"), under the Securities Act of 1933 (the "1933 Act"), and a registration statement on Form N-8B-2 (Registration No. 811-7330) under the Investment Company Act of 1940 (the "1940 Act"), the forms of which have heretofore been delivered to the Distributor; and

WHEREAS, the Trust will create and redeem SPDRs only in aggregations constituting a Creation Unit as such term is used in the Registration Statement (as defined herein), in accordance with the terms and conditions set forth therein; and

WHEREAS, the Distributor is a registered broker-dealer under the Securities Exchange Act of 1934, as amended (the "1934 Act"); and

WHEREAS, the Trust and the Sponsor desire to retain the Distributor to act as distributor with respect to the creation and distribution of SPDRs in Creation Unit aggregations as set forth in the Trust's Registration Statement, hold itself available to receive and process orders for SPDRs in the manner set forth in the Trust's then-current prospectus and to enter into arrangements with dealers; and

WHEREAS, the Distributor desires to render these services to the Trust;

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, the Sponsor, the Trust and the Distributor hereby agree as follows:

Section 1
Distribution and Beneficial Owners

1.1 Appointment. The Trust and the Sponsor hereby appoint the Distributor as the exclusive distributor for SPDRs in Creation Unit aggregations on the

terms and for the periods set forth in this Agreement, and the Distributor hereby accepts such appointment and agrees to act in such capacity hereunder.

1.2 Definitions.

(a) The term "Registration Statement" shall mean the registration statement most recently filed from time to time by the Trust with the Securities and Exchange Commission (the "Commission") and effective under the 1933 Act, as amended, and the 1940 Act, as amended, as such registration statement is amended by any amendments thereto at the time in effect.

(b) The term "Prospectus" shall mean the prospectus included as part of the Trust's Registration Statement, as such prospectus may be amended or supplemented from time to time.

(d) All capitalized terms used but not defined in this Agreement shall have the meanings ascribed to such terms in the Registration Statement.

1.3 Distributor's Duties. The Distributor shall have the following duties:

(a) The Distributor agrees, as agent for the Trust, that all orders to create SPDRS in Creation Unit size aggregations must be placed with the Distributor, and it is the responsibility of the Distributor to transmit such orders to the Trustee, as described in the Registration Statement and in accordance with the provisions thereof.

(b) The right granted to the Distributor to receive all orders to create SPDRs in Creation Unit size aggregations and to transmit such orders to the Trustee shall be exclusive, and no other principal underwriter or distributor shall be granted such right; provided, however, that nothing herein shall affect or limit the right and ability of the Trustee to accept Portfolio Deposits and related Cash Components (each as defined in the Prospectus) through or outside of the SPDR Clearing Process, and as provided in and in accordance with the then-current Prospectus. The exclusive right to place creation orders for SPDRs granted to the Distributor may be waived by the Distributor by notice to the Trust and the Sponsor in writing, either unconditionally or subject to such conditions and limitations as may be set forth in such notice to the Trust and the Sponsor. The Trust and the Sponsor hereby acknowledge that the Distributor may render principal underwriting, distribution and other services to other parties, including other unit investment trusts.

(c) At the request of the Trust and the Sponsor, the Distributor shall enter into "Participant Agreements between and among Participating Parties, the Distributor and the Trustee, in accordance with the provisions of the Registration Statement and current prospectus and in the form attached hereto as Exhibit A.

(d) Except as otherwise noted in the Registration Statement and current Prospectus, the offering price for all Creation Units sold to investors by the

Distributor will be the net asset value per Creation Unit, calculated in the manner described in the Registration Statement and current Prospectus.

(e) In performing its duties hereunder, the Distributor shall act in conformity with the Trust Agreement, Registration Statement and the then-current Prospectus relating to SPDRS and the Trust and with the instructions and directions of the Sponsor and Trustee of the Trust, and will comply with and conform in all material respects to the requirements of the 1933 Act, the 1934 Act and the 1940 Act and all other applicable federal and state laws, regulations and rulings, and the rules and regulations of the National Association of' Securities Dealers, Inc. ("NASD").

(f) The Distributor shall not be obligated to accept any certain number of orders for Creation Unit size aggregations of SPDRs, and nothing herein contained shall prevent the Distributor from entering into like distribution arrangements with other investment companies.

(g) The Distributor shall clear and file all advertising, sales, marketing and promotional materials of the Trust provided to the Distributor, or in the preparation of which it has participated, with the NASD as required by the 1933 Act and the 1940 Act, and the rules promulgated thereunder, and by the rules of the NASD. The Distributor is not authorized to give any information or to make any representations other than those contained in the Registration Statement or current Prospectus, as amended from time to time, or contained in reports to Beneficial Owners or other materials that may be prepared by the Trustee or Sponsor on behalf of the Trust for the Distributor.

(h) The Distributor shall consult with the Sponsor and the Trust with respect to the production and printing of prospectuses to be used in connection with creations by new creators of Creation Unit aggregations of SPDRs.

(i) In performing its duties hereunder the Distributor shall be entitled to rely on and shall not be responsible in any way for information provided to it by the Trustee, the Sponsor or the Trust and their respective service providers and shall not be liable or responsible for the errors and omissions of such service providers, provided that the foregoing shall not be construed to protect the Distributor against any liability to the Trustee, the Sponsor, the Trust or the Trust's Beneficial Owners to which the Distributor would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations and duties under this Agreement.

1.4 The Trust's and Sponsor's Duties. The Trust and Sponsor shall have the following duties:

(a) The Trust and Sponsor agree to create Creation Unit size aggregations of SPDRs, subject to paragraph (c) of this Section 1.4, and to request the Depository to record on its books the ownership of such SPDRs in accordance with the book-entry system procedures described in the Prospectus in such

amounts as the Distributor has requested in writing or other means of data transmission, as promptly as practicable after receipt by the Trustee on behalf of the Trust of the requisite Portfolio Deposit and Cash Component (together with any fees) for such creations and acceptance by the Trustee or by the Distributor on behalf of the Trust of a creation order for such SPDRs, upon the terms described in the Registration Statement.

(b) The Trust and Sponsor shall furnish to the Distributor copies of all information, financial statements and other papers which the Distributor may reasonably request for use in connection with the distribution of Creation Units. The Trust and the Sponsor shall make available to the Distributor such number of copies of the current Prospectus as the Distributor may reasonably request. The Trust and the Sponsor authorize the Distributor to use the Prospectus, but the Trust and the Sponsor shall not be responsible in any way for any information, statements or representations given or made by the Distributor or its representatives or agents other than such information, statements or representations as are contained in the Prospectus or financial reports filed on behalf of the Trust or in any sales literature or advertisements specifically approved by the Trust and the Sponsor in writing.

(c) The Sponsor agrees that it will take all necessary action to register an indefinite number of SPDRs under the 1933 Act, as amended. The Sponsor shall take, from time to time, such steps, including payment of the related filing fees, as may be necessary to register SPDRs under the 1933 Act and the 1940 Act to the end that all Creation Unit size aggregations of SPDRs will be properly registered under the 1933 Act and the 1940 Act. The Trust and the Sponsor agree to file from time to time such amendments, supplements, reports and other documents as may be necessary in order that there may be in a Registration Statement or Prospectus no (i) untrue statement of a material fact or (ii) omission to state a material fact necessary in order to make the statements therein, in the case of the Prospectus; in light of the circumstances in which made, not misleading. The Distributor shall furnish such information and other material relating to its affairs and activities as may be required by the Trust and the Sponsor for inclusion in the Registration Statement or Prospectus.

(d) The Trust and the Sponsor shall keep the Distributor informed of the states and other foreign and domestic jurisdictions in which the Trust has effected notice filings of shares of SPDRs for sale under the securities laws thereof. The Distributor shall furnish such information and other material relating to its affairs and activities as may be required by the Trust and the Sponsor in connection with such filings.

(e) In accordance with the provisions of the then-current prospectus, the Trust may reject any creation order for Creation Unit aggregations of SPDRs or stop all receipts of creation orders for SPDRs at any time or from time to time upon reasonable notice to the Distributor.

1.5 Representations.

(a) The Distributor represents and warrants to the Trust and the Sponsor that (i) it is duly organized as a Colorado corporation and is and at all times will remain duly authorized and licensed to carry out its services as contemplated herein; (ii) the execution, delivery and performance of this Agreement are within its power and have been duly authorized by all necessary action; and (iii) its entering into this Agreement or providing the services contemplated hereby does not conflict with or constitute a default or require a consent under or breach of any provision of any agreement or document to which the Distributor is a party or by which it is bound (except for any consent in writing which shall have been obtained by the date hereof).

(b) The Sponsor represents and warrants to the Distributor that (i) the Registration Statement and the Prospectus have been prepared in conformity in all material respects with the 1933 Act, the 1940 Act and the rules and regulations of the Commission (the "Rules and Regulations"); (ii) contain all statements required to be stated therein in accordance with the 1933 Act, the 1940 Act and the Rules and Regulations; and (iii) all statements of fact contained therein are true and correct in all material respects at the time indicated or the effective date, as the case may be, and neither the Registration Statement nor the Prospectus shall include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the case of the Prospectus in light of the circumstances in which made, not misleading. The Trust and the Sponsor shall from time to time file such amendment or amendments to the Registration Statement and the Prospectus as, in the light of future developments, shall, in the opinion of the Trust's counsel, be necessary in order to have the Registration Statement and the Prospectus at all times contain all material facts required to be stated therein or necessary to make the statements therein, in the case of the Prospectus in light of the circumstances in which made, not misleading to a purchaser of shares. The Trust shall not file any amendment to the Registration Statement or the Prospectus without giving the Distributor reasonable notice thereof in advance, provided that nothing in this Agreement shall in any way limit the Trust's right to file at any time such amendments to the Registration Statement or the Prospectus as the Trust may deem advisable. Notwithstanding the foregoing, the Trust and the Sponsor shall not be deemed to make any representation or warranty as to any information or statement provided by the Distributor for inclusion in the Registration Statement or the Prospectus.

1.	any request by the Commission for amendments to the Trust's Registration Statement or Prospectus or for additional information;

2.	any stop order suspending the effectiveness of the Trust's Registration Statement or the initiation of any proceeding for that purpose;

3.	all significant actions of the Commission having a material impact with respect to any amendment to the Trust's Registration Statement or Prospectus.

Section 2
Fees and Expenses

2.1 Compensation of the Distributor. The Sponsor shall pay to the Distributor, for its services described in this Agreement, an annual distribution fee of $525,000 such fee to be paid monthly in advance on the first day of each calendar month with the first payment to be delivered upon the effectiveness of this Agreement in a prorated amount.

2.2 Expenses.

(a) Each party hereto will bear its own expenses in connection with this Agreement unless otherwise agreed by the parties hereto in writing. In addition, the expenses of the Trust shall be borne by the Trust as described under the caption "Expenses of the Trust ^" in the Prospectus.

(b) The Distributor shall bear the following costs and expenses relating to the distribution of SPDRs: (i) the costs (other than those payable pursuant to the Trust's agreement with the Depository) of processing and maintaining records of creations of Creation Units; (ii) all costs of maintaining the records required of a broker/dealer registered under the 1934 Act; (iii) the expenses of maintaining its registration or qualification as a dealer or broker under federal or state laws; (iv) the expenses incurred by the Distributor in connection with normal (non-expedited) NASD filing fees; and (v) all other expenses incurred in connection with the distribution services as contemplated herein, except as otherwise specifically provided in this Agreement.

Section 3
Indemnification

3.1 Indemnification of Distributor. The Sponsor agrees to indemnify, defend and hold the Distributor, its officers and directors and any person who controls the Distributor within the meaning of Section 15 of the 1933 Act (any of the Distributor, its officers and directors or such control persons, for purposes of this Section 3.1, an "Indemnitee"), free and harmless from and against any and all claims, demands, liabilities, and expenses (including costs reasonably incurred in connection with investigating or defending such claims, demands or liabilities and any counsel fees reasonably incurred in connection therewith) which the Indemnitee may incur, under the 1933 Act or under common law or otherwise, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in the Trust's

Registration Statement, or the omission or alleged omission to state in such document a material fact required to be stated therein or necessary to make the statements therein not misleading or, with respect to the Prospectus or any amendment or supplement thereto, any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state in such document a material fact required to be stated therein or necessary to make the statements therein in the light of the circumstances under which they were made, not misleading; provided, however, that nothing in this Section 3.1 shall protect the lndemnitee against any liability to the Trust or its Beneficial Owners that the Indemnitee would otherwise be subject to (i) by reason of willful malfeasance, bad faith, or gross negligence in the performance of its duties, (ii) by reason of the Indemnitee's reckless disregard of its obligations and duties under this Agreement, or (iii) where such liability arises out of or is based upon any untrue statement or omission or alleged untrue statement or omission in the Trust's Registration Statement or Prospectus that was made in reliance upon and in conformity with written information furnished by the Distributor to the Trust and the Sponsor; and provided, further, that the Trust will not be liable in any such case to the lndcmnitee with respect to any untrue statement or omission or alleged untrue statement or omission made in the Registration Statement or the Prospectus that is subsequently corrected in such document (or an amendment thereof or supplement thereto), if a copy of the Prospectus (or such amendment thereof or supplement thereto) was not sent or given to the person asserting any such claim, demand, liability or expense at or before the written confirmation of the sale to such person in any case where such delivery is required by the 1933 Act and the Trust had notified the Distributor of the amendment or supplement prior to the sending of the written confirmation of sale. The Sponsor's obligation to indemnify the Indemnitee is expressly conditioned upon the Indemnitee's notification of the Sponsor of the commencement of any action against the lndemnitee, which notification shall be given by letter or by facsimile transmission addressed to the Sponsor at its principal offices in New York, New York, and sent to the Sponsor by the person against whom such action is brought within ten days after the summons or other first legal process shall have been served. The Indemnitee's failure to so notify the Sponsor shall not relieve the Sponsor of any liability which it may have to the Indemnitee by reason of any such alleged untrue statement or omission or alleged untrue statement or omission independent of this indemnification. The Sponsor will be entitled to assume the defense of any suit brought to enforce any such claim, demand or liability and to retain legal counsel of good standing chosen by the Sponsor and approved by the Indemnitee (such approval not to be unreasonably withheld). If the Sponsor elects to assume the defense of' any such suit and retain counsel approved by the Indemnitee, the Sponsor shall bear the fees and expenses of any additional counsel retained by it. In the event the Sponsor does not elect to assume the defense of any such suit and retain counsel of good standing

approved by the Indemnitee or the Indemnitee does not approve of the counsel chosen by the Sponsor (such approval not to be unreasonably withheld), the Sponsor shall bear the fees and expenses of any counsel retained by it. The indemnification agreement contained in this Section 3.1 shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Indemnitee and shall survive the sale of any Creation Units of shares made pursuant to purchase orders obtained by the Indemnitee. This indemnification will inure exclusively to the benefit of the Indemnitee and its successors, assigns and estate. The Sponsor shall promptly notify the Indemnitee of the commencement of any litigation or proceeding against the Trust or the Sponsor in connection with the issue and sale of any Creation Units of shares.

3.2 Indemnification of the Sponsor. The Distributor agrees to indemnify, defend, and hold the Sponsor, its several officers and directors and any person who controls the Sponsor within the meaning of Section 15 of the 1933 Act (for purposes of this Section 3.2, the Sponsor, its officers and directors, if any, and its controlling persons are collectively referred to as the "Sponsor Affiliates"), free and harmless from and against any and all claims, demands, liabilities, and expenses (including costs reasonably incurred in investigating or defending such claims, demands or liabilities and any counsel fees reasonably incurred in connection therewith) which the Sponsor Affiliates may incur under the 1933 Act or under common law or otherwise, but only to the extent that such liability or expense shall arise out of or be based upon (i) any untrue statement or alleged untrue statement of a material fact contained in information furnished by the Distributor to the Sponsor for use in the Registration Statement or Prospectus in effect from time to time under the 1933 Act, or (ii) any omission or alleged omission, on the part of the Distributor, to state a material fact in connection with such information required to be stated in the Registration Statement or Prospectus or necessary to make such information not misleading, it being understood that the Sponsor will rely upon the information provided by the Distributor for use in the preparation of the Registration Statement and the Prospectus, or (iii) any alleged act or omission on the Distributor's part as the Trust's agent that has not been expressly authorized by the Sponsor in writing. The Distributor's obligation to indemnify the Sponsor Affiliates is expressly conditioned upon the Distributor being notified of the commencement of any action brought against the Sponsor Affiliates, which notification shall be given by letter or facsimile transmission addressed to the Distributor at its principal offices in Denver, Colorado, and sent to the Distributor by the person against whom such action is brought within ten days after the summons or other first legal process shall have been served. The Sponsor Affiliates' failure to notify the Distributor of the commencement of any such action shall not relieve the Distributor from any liability which it may have to the Sponsor Affiliates by reason of any such untrue statement or omission or alleged untrue statement or omission on the

part of the Distributor independent of this indemnification. The Distributor shall have a right to control the defense of such action, with counsel of its own choosing, satisfactory to the Sponsor Affiliates, if such action is based solely upon such untrue statement or omission or alleged untrue statement or omission on its part, and in any other event the Distributor and the Sponsor Affiliates shall each have the right to participate in the defense or preparation of the defense of such action at their own expense.

Section 4
Duration, Termination, and Amendment

4.1 Duration. This Agreement shall become effective on December 1, 1997 and continue, unless terminated as provided in Section 4.2 or until the termination of the Trust.

4.2 Termination. Subject to Section 4.5(b), this Agreement may be terminated at any time, without penalty, upon 60 days' prior written notice to the other party by the Trust and the Sponsor, or by the Distributor.

4.3 Assignment. This Agreement shall automatically terminate in the event of its "assignment." As used in this Agreement, the term "assignment" shall have the meaning such term has in the 1940 Act.

4.4 Amendment. Subject to Section 4.5(c), this Agreement may be amended by mutual consent, provided that no provision of this Agreement may be changed, waived, discharged or terminated except by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought.

Section 5
Notice

5.1 Notification of Parties. Any notice or other communication required or permitted to be given pursuant to this Agreement shall be deemed duly given if addressed and delivered, or mailed by registered mail, postage prepaid, to (1) ALPS Mutual Funds Services, Inc., at 370 17th Street, Suite 1700, Denver, CO 80202, Attention: James V. Hyatt, General Counsel, and (2) PDR Services Corporation, 86 Trinity Place, New York, NY 10006, Attention: Joseph Stefanelli, President.

Section 6
Miscellaneous

6.1 Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

6.2 Captions. The caption in this Agreement are included for convenience only and in no way define or limit any of the provisions hereof or otherwise affect their construction.

6.3 Severability. If any provisions of this Agreement shall be held or made invalid, in whole or in part, then the other provisions of this Agreement shall remain in force. Invalid provisions shall, in accordance with this Agreement's intent and purpose, be amended, to the extent legally possible, by valid provisions in order to effectuate the intended results of the invalid provisions.

6.4 Insurance. The Distributor will maintain at its expense an errors and omissions insurance policy which covers services by the Distributor hereunder.

6.5 Force Majeure. In the event a party is hereto unable to perform its obligations under the terms of this Agreement because of acts of God, strikes, equipment or transmission failure or damage reasonably beyond its control, or other causes reasonably beyond its control, such party shall not be liable to any other party for any damages resulting from such failure to perform or otherwise from such causes.

6.6 Counterparts. This Agreement may be executed in counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the day and year first written above.

SPDR TRUST, Series 1

By:

Name:

PDR SERVICES CORPORATION

By:

Name:

Title:

ALPS MUTUAL FUNDS SERVICES, INC.

By:

Name:

Title:

Accepted and acknowledged by:

STATE STREET BANK AND TRUST COMPANY

By:

Name:

Title: