SPDR TRUST SERIES 1 (Form: 485BPOS, Received: 01/26/2007 16:48:17)

Shareholder Fees:*

(fees paid directly from your investment)

Estimated Trust Annual Ordinary Operating Expenses:






   As filed with the Securities and Exchange Commission on January 26, 2007

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



                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549



                         POST EFFECTIVE AMENDMENT NO. 17



                                       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:

          Claire McGrath, Esq.
          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 $261,764.00
was paid on December 26, 2006 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 26, 2007 at 4:00 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)

[SPDR LOGO]

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 26, 2007

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


TABLE OF CONTENTS
Summary				1
Essential Information as of September 30, 2006				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				27
The Trust				33
Creation of Creation Units				33
Procedures for Creation of Creation Units				34
Placement of Creation Orders Using SPDR Clearing Process				36
Placement of Creation Orders Outside SPDR Clearing Process				36
Securities Depository; Book-Entry-Only System				37
Redemption of SPDRs				39
Procedures for Redemption of Creation Units				39
Placement of Redemption Orders Using SPDR Clearing Process				41
Placement of Redemption Orders Outside SPDR Clearing Process				42
The Portfolio				42
Portfolio Securities Conform to the S&P 500 Index				43

TABLE OF CONTENTS cont’d


Adjustments to the Portfolio Deposit				46
The S&P 500 Index				48
License Agreement				50
Exchange Listing				51
Tax Status of the Trust				52
Income Tax Consequences to Beneficial Owners				52
ERISA Considerations				55
Continuous Offering of SPDRs				56
Dividend Reinvestment Service				57
Expenses of the Trust				57
Trustee Fee Scale				59
Valuation				60
Administration of the Trust				61
Distributions to Beneficial Owners				61
Statements to Beneficial Owners; Annual Reports				63
Rights of Beneficial Owners				63
Amendments to the Trust Agreement				64
Termination of the Trust Agreement				64
Sponsor				66
Trustee				67
Depository				68
Legal Opinion				68
Independent Registered Public Accounting Firm				69
Code of Ethics				69
Information and Comparisons Relating to Trust, Secondary Market Trading, Net Asset Size, Performance and Tax Treatment				70
Glossary				77

‘‘Standard & Poor’s®’’, ‘‘S&P®’’,‘‘S&P 500®’’, ‘‘Standard & Poor’s 500®’’, ‘‘500’’, ‘‘Standard & Poor’s Depositary Receipts®’’ and ‘‘SPDRs®’’ are trademarks of The McGraw-Hill Companies, Inc. State Street Global Markets, LLC is permitted to use these trademarks pursuant to a ‘‘License Agreement’’ with Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., and SPDR Trust, Series 1, is permitted to use these trademarks pursuant to a sublicense from State Street Global Markets, LLC. 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, 2006*


Glossary:				All defined terms used in this Prospectus and page numbers on which their definitions appear are listed in the Glossary on page 77.
Total Trust Assets:				$57,902,741,439
Net Trust Assets:				$57,585,884,975
Number of SPDRs:				431,250,096
Fractional Undivided Interest in the Trust Represented by each SPDR:				1/431,250,096th
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:				9.45/100 of one percent (0.0945%) (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):				$133.53
Evaluation Time:				Closing time of the regular trading session on the New York Stock Exchange, LLC. (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.

As of February 1, 2007, ordinary operating expenses of the Trust, net of the Trustee waiver, accrue at 0.0945%. As of the fiscal year ended September 30, 2006, ordinary operating expenses of the Trust were 0.1204%, but the excess over 0.1000% was waived by the Trustee and, after excess balance credits of 0.0157% were applied, the net expenses of the Trust were 0.0843%. 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, 2008, but may thereafter discontinue this voluntary waiver policy. The Trustee’s fee waiver will be calculated after earnings credits are applied. The amount of the earnings credit will be equal to the Federal Funds Rate, as reported in nationally distributed publications, multiplied by each day’s daily cash balance in the Trust’s cash account, reduced by the amount of reserves for that account required by the Federal Reserve Board of Governors. 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 0.0945% 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, LLC (‘‘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 Multiples of 50,000 SPDRs Called ‘‘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.’’ Fractional Creation Units may be created or redeemed only in limited circumstances.*

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. 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.

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

*	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.

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 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. The 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 (including earnings credits as a result of uninvested cash balances of the Trust), the Trust currently is accruing ordinary operating expenses at an annual rate of 0.0945%.


Current Trust Annual Ordinary Operating Expenses	As a % of Trust Net Assets
Trustee’s Fee		.0612	%
Trustee Reduction for Earnings Credits**		(0.0218	)%
S&P License Fee		.0350	%
Registration Fees		.0000	%
Marketing		.0200	%
Other Operating Expenses		.0017	%
Total:		0.0961	%
Trustee Waiver**		(.0016	)%
Net Expenses After Waiver		0.0945	%

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’’).

Until February 1, 2008, the Trustee has agreed to waive a portion of its fee to the extent operating expenses exceed 0.0945% after taking into consideration the earnings credit with respect to uninvested cash balances of the Trust. The amount of the earnings credit will be equal to the Federal Funds Rate, as reported in nationally distributed publications, multiplied by each day’s daily cash balance in the Trust’s cash account, reduced by the amount of

reserves for that account required by the Federal Reserve Board of Governors. Thereafter, the Trustee may discontinue this voluntary waiver policy. Therefore, there is no guarantee that the Trust’s ordinary operating expenses will not exceed 0.0945% of the Trust’s daily NAV.

• 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, 2006)’’ (‘‘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 for the past 10 years ended December 31, 2006. During the period shown above (January 1, 1997 through December 31, 2006), 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 12/15/06 income distribution is the 12/29/06 NAV. The actual reinvestment price is the 1/31/07 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, 2006)


	Past One Year			Past Five Years			Past Ten Years
SPDR Trust, Series 1
Return Before Taxes ^(1)(2)(3)(4)		15.65	%		6.07	%		8.28	%
Return After Taxes on Distributions ^(1)(2)(3)(4)		15.34	%		5.71	%		7.84	%
Return After Taxes on Distributions and Redemption of Creation Units ^(1)(2)(3)(4)		10.56	%		5.11	%		7.09	%
S&P 500 Index ⁽⁵⁾		15.79	%		6.19	%		8.42	%

(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)	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, under certain limited circumstances 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.’’ Under limited certain circumstances, special dividend payments also may be made to the Beneficial Owners. See ‘‘Administration of the Trust—Distributions to Beneficial Owners.’’

• The Trust Intends to Qualify as a Regulated Investment Company

For the fiscal year ended September 30, 2006, 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 (a) for the maximum 15% tax rate for non-corporate taxpayers through 2008 and (b) 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 under certain circumstances, as set forth in the Exchange rules and procedures, that, in the view of the Exchange, makes 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. The Exchange also must halt trading if required intraday valuation information is not disseminated for longer than one Business Day. 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, 2006, 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 Trust’s management; 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 management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at September 30, 2006 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Boston, Massachusetts
November 20, 2006

SPDR Trust Series 1
Statement of Assets and Liabilities
September 30, 2006


Assets
Investments in securities, at value (including affiliated investments of $98,607,226)	$	57,539,678,182
Cash		287,714,888
Receivable for investments sold		9,014,467
Receivable for SPDR’s issued in-kind		2,740,312
Dividends receivable		63,593,590
Total Assets		57,902,741,439
Liabilities
Payable for investments purchased		39,754,934
Payable for income delivered for SPDR’s in-kind transactions		189,872
Accrued Trustee expense		2,890,701
Income distribution payable		254,822,755
Accrued expenses and other liabilities		19,198,202
Total Liabilities		316,856,464
Net Assets	$	57,585,884,975
Net Assets Represented by:
Paid in surplus	$	70,933,483,856
Distribution in excess of net investment income		(212,090,299	)
Accumulated net realized loss on investments		(5,681,985,197	)
Net unrealized depreciation on investments		(7,453,523,385	)
Net Assets	$	57,585,884,975
Net asset value per SPDR	$	133.53
Units of fractional undivided interest (‘‘SPDRs’’) outstanding, unlimited units authorized, $0.00 par value		431,250,096
Cost of investments (including cost of affiliated investments of $96,337,534)	$	64,993,201,567

See accompanying notes to financial statements.

SPDR Trust Series 1
Statements of Operations
September 30, 2006


	For the Year Ended September 30, 2006			For the Year Ended September 30, 2005			For the Year Ended September 30, 2004
Investment Income
Dividend income	$	1,041,202,183		$	1,089,904,791		$	727,345,627
Expenses
Trustee expense		33,325,993			31,597,760			25,819,307
Marketing expense		12,253,449			15,473,877			12,584,583
S&P license fee		19,060,993			18,052,857			14,682,013
SEC registration fee		—			500,000			191,800
Legal and audit services		128,941			246,250			126,596
Other expenses		799,386			842,504			381,914
Total expenses		65,568,762			66,713,248			53,786,213
Trustee expense waiver		(11,108,781	)		(15,133,657	)		(7,350,434	)
Net expenses		54,459,981			51,579,591			46,435,779
Trustee earnings credit		(8,560,492	)		(2,730,415	)		(1,233,786	)
Net expenses after Trustee earnings credits		45,899,489			48,849,176			45,201,993
Net Investment Income		995,302,694			1,041,055,615			682,143,634
Realized and Unrealized Gain/(Loss) on Investments
Net realized gain/(loss) on investment transactions		2,964,544,730			4,542,842,784			2,220,162,834
Net change in unrealized appreciation (depreciation)		2,099,035,723			(74,477,234	)		2,153,046,919
Net Realized and Unrealized Gain/(Loss) on Investments		5,063,580,453			4,468,365,550			4,373,209,753
Net increase (decrease) in net assets resulting from operations	$	6,058,883,147		$	5,509,421,165		$	5,055,353,387

See accompanying notes to financial statements.

SPDR Trust Series 1
Statements of Changes in Net Assets


	For the Year Ended September 30, 2006			For the Year Ended September 30, 2005			For the Year Ended September 30, 2004
Increase (decrease) in net assets resulting from operations:
Net investment income	$	995,302,694		$	1,041,055,615		$	682,143,634
Net realized gain (loss) on investment transactions		2,964,544,730			4,542,842,784			2,220,162,834
Net change in unrealized appreciation (depreciation)		2,099,035,723			(74,477,234	)		2,153,046,919
Net increase/(decrease) in net assets resulting from operations		6,058,883,147			5,509,421,165			5,055,353,387
Undistributed net investment income included in price of units issued and redeemed		64,697,330			45,350,560			67,955,540
Distributions to unitholders from net investment income		(1,059,134,562	)		(1,085,600,597	)		(741,887,578	)
Net increase (decrease) in net assets from issuance and redemption of SPDRs		5,492,844,774			(3,156,501,800	)		5,279,936,052
Net increase (decrease) in net assets during period		10,557,290,689			1,312,669,328			9,661,357,401
Net assets at beginning of period		47,028,594,286			45,715,924,958			36,054,567,557
Net assets end of period*	$	57,585,884,975		$	47,028,594,286		$	45,715,924,958
* Includes undistributed (distribution in excess of) net investment income	$	(212,090,299	)	$	(147,564,863	)	$	(96,877,537	)

See accompanying notes to financial statements.

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


	For the Year Ended 9/30/06			For the Year Ended 9/30/05			For the Year Ended 9/30/04			For the Year Ended 9/30/03			For the Year Ended 9/30/02
Net asset value, beginning of year	$	122.85		$	111.78		$	99.87		$	81.78		$	104.33
Investment Operations:
Net investment income		2.32	(4)		2.40	(3)		1.81			1.55			1.46
Net realized and unrealized gain (loss) on investments		10.69			11.07			11.89			18.09			(22.55	)
Total from investment operations		13.01			13.47			13.70			19.64			(21.09	)
Less distributions from:
Net investment income		(2.33	)		(2.40	)		(1.79	)		(1.55	)		(1.46	)
Net asset value, end of year	$	133.53		$	122.85		$	111.78		$	99.87		$	81.78
Total investment return		10.64	%		12.11	%		13.62	%		24.13	%		(20.46	)%
Ratios and supplemental data
Ratio to average net assets:
Net investment income		1.83	%		2.02	%		1.63	%		1.67	%		1.40	%
Total expenses(1)		0.08	%		0.10	%		0.11	%		0.12	%		0.11	%
Total expenses excluding Trustee earnings credit		0.10	%		0.10	%		0.11	%		0.12	%		0.12	%
Total expenses excluding Trustee earnings credit and fee waivers		0.12	%		0.13	%		0.13	%		0.13	%		0.13	%
Portfolio turnover rate(2)		3.70	%		6.01	%		2.23	%		1.76	%		4.43	%
Net assets, end of year (000’s)	$	57,585,885		$	47,028,594		$	45,715,925		$	36,054,568		$	30,698,877

(1)	Net of expenses reimbursed by the Trustee.

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

(3)	Net investment income per unit reflects receipt of a special one time dividend from a portfolio holding. The effect of this dividend amounted to $0.40 per share.

(4)	Per share numbers have been calculated using the average shares method.

See accompanying notes to financial statements.

SPDR Trust Series 1
Notes to Financial Statements
September 30, 2006

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 there is no closing sale price available, valuation will be determined by the Trustee in good faith based on available information.

In September, 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (‘‘SFAS 157’’), was issued and is effective for the fiscal years beginning after November 15, 2007. FAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact, if any, the adoption of SFAS 157 will have on the Funds’ financial statements.

Investment Risk

The Trust invests in various investments which are exposed to risks, such as market risk. Due to the level of risk associated with certain investments it is at least reasonably possible that changes in the values of investment

SPDR Trust Series 1
Notes to Financial Statements
September 30, 2006

securities will occur in the near term and that such changes could materially affect the amounts reported in the financial statements.

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.

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.

Equalization

The Trust follows the accounting practice known as ‘‘Equalization’’ by which a portion of the proceeds from sales and costs of reacquiring the Trust’s units, equivalent on a per unit basis to the amount of distributable net investment income on the date of the transaction, is credited or charged to undistributed net investment income. As a result, undistributed net investment income per unit is unaffected by sales or reacquisitions of the Trust’s units.

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 unit calculations in the financial highlights for all years presented exclude these differences.

During 2006, the Trust reclassified $4,276,614,631 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

SPDR Trust Series 1
Notes to Financial Statements
September 30, 2006

September 30, 2006, the Trust had capital loss carryforwards of $27,700,040, $56,816,996, $403,831,303, $472,492,447, $1,530,834,020, $445,024,832, $380,379,645, and $1,174,140,896 which will expire on September 30, 2007, September 30, 2008, September 30, 2009, September 30, 2010, September 30, 2011, September 30, 2012, September 30, 2013 and September 30, 2014, respectively. The Trust incurred losses of $1,066,922,516 during the period November 1, 2005 through September 30, 2006 that were deferred for tax purposes until fiscal 2007.

The tax character of distributions paid during the year ended September 30, 2006 was $1,059,134,562 of ordinary income. The tax character of distributions paid during the year ended September 30, 2005 was $1,085,600,597 of ordinary income. The tax character of distributions paid during the year ended September 30, 2004 was $741,887,578 of ordinary income.

As of September 30, 2006, the components of distributable earnings (excluding unrealized appreciation/(depreciation)) on the tax basis were undistributed ordinary income of $42,701,199 and undistributed long term capital gain of $0.

On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB Interpretation No. 48 ‘‘Accounting for Uncertainly in Income Taxes’’ (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the fund’s tax returns to determine whether the tax positions are ‘‘more-likely-than-not’’ of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. At this time, management is evaluating the implications of FIN 48 and its impact in the financial statements has not yet been determined.

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

SPDR Trust Series 1
Notes to Financial Statements
September 30, 2006

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, 2006:

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, 2006, the Adjustment Amount reduced the Trustee’s fee by $8,876,544. The Adjustment Amount included an excess of net transaction fees from processing orders of $316,052 and a Trustee earnings credit of $8,560,492.

Effective November 1, 2006, the Trustee changed the method of computing the Adjustment Amount to the Trustee Fee such that all income earned with respect to cash held for the benefit of the Trust is credited against the Trustee’s Fee. In addition, during the period from December 1, 2006 through December 31, 2006, the Trustee will apply incremental cash balance credits of approximately $5.9 million (approximately $0.0005 per share per day, based upon 470 million outstanding shares) against its base fee. Such incremental credit will be calculated and applied on a daily basis during such period.

The Trustee voluntarily agreed to waive a portion of its fee, as needed, for one year through February 1, 2007, so that the total operating expenses would not exceed 10/100 of 1% per annum of the daily net asset value. The total amount of such reimbursement by the Trustee for the year ended September 30, 2006 was $11,108,781. The Trustee has not entered into an agreement with the Trust to recapture waived fees in subsequent periods.

Standard and Poor’s (‘‘S&P’’) and State Street Global Markets, LLC (‘‘SSGM’’) have entered into a License Agreement. The License Agreement grants SSGM, an affiliate of the Trustee, 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

SPDR Trust Series 1
Notes to Financial Statements
September 30, 2006

Trustee on behalf of the Trust, the American Stock Exchange LLC (the ‘‘AMEX’’), and PDR Services (the ‘‘Sponsor’’) have each received a sublicense from SSGM for the use of the S&P 500 Index and such trade names and trademarks in connection with their rights and duties with respect to the Trust. The Trust pays an annual sub-license fee to S&P equal to the greater of: (i) 0.03% of the 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.

Indemnifications

Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. However, based on experience the Trust expects the risk of loss to be remote.

Transactions with Affiliated Issuers

Certain investments made by The Trust represent securities affiliated with the Trustee. Investments in State Street Corp., the holding company of State Street Bank and Trust Company, were made according to its representative portion of the S&P 500 Index. The market value of these investments at September 30, 2006 is listed in the Schedule of Investments.

SPDR Trust Series 1
Notes to Financial Statements
September 30, 2006

NOTE 4—TRUST TRANSACTIONS IN SPDRS

Transactions in SPDRs were as follows:


	Year Ended September 30, 2006						Year ended September 30, 2005						Year ended September 30, 2004
	SPDRs			Amount			SPDRs			Amount			SPDRs			Amount
SPDRs sold		707,000,000		$	89,665,093,167			625,250,000		$	75,185,061,183			262,700,000		$	29,115,803,571
Dividend reinvestment SPDRs issued		96,447			12,194,198			73,825			8,743,709			27,657			3,069,876
SPDRs redeemed		(658,650,000	)		(84,119,745,261	)		(651,500,000	)		(78,304,956,132	)		(214,750,000	)		(23,770,981,855	)
Net income equalization		—			(64,697,330	)		—			(45,350,560	)		—			(67,955,540	)
Net increase (decrease)		48,446,447		$	5,492,844,774			(26,176,175	)	$	(3,156,501,800	)		47,977,657		$	5,279,936,052

With the exception of 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, 2006, the Trust had in-kind contributions, in-kind redemptions, purchases and sales of investment securities of $66,547,912,601, $61,089,119,199, $2,003,252,293, and $2,544,954,612, respectively. At September 30, 2006, the cost of investments for federal income tax purposes was $65,117,012,818, accordingly, gross unrealized appreciation was $1,488,481,299 and gross unrealized depreciation was $9,065,815,935, resulting in net unrealized depreciation of $7,577,334,636.

Tax Information (unaudited)

For Federal income tax purposes, the percentage of Trust distributions which qualify for the corporate dividends received deduction for the fiscal year ended September 30, 2006 is 99.76%.

SPDR Trust Series 1
Notes to Financial Statements
September 30, 2006

For the fiscal year ended September 30, 2006 certain dividends paid by the Trust may be designated as qualified dividend income and subject to maximum tax rate of 15%, as provided for the Jobs and Growth Tax Relief Reconciliation Act of 2003. Complete information will be reported in conjunction with your 2006 Form 1099-DIV.

FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
Bid/Ask Price vs. Net Asset Value
as of September 30, 2006


	Closing Price Above NAV						Closing Price Below NAV
	50 - 99 BASIS POINTS		100 - 199 BASIS POINTS		>200 BASIS POINTS		50 - 99 BASIS POINTS		100 – 199 BASIS POINTS		> 200 BASIS POINTS
2006		0		0		0		0		0		0
2005		0		0		0		0		0		0
2004		0		0		0		1		0		0
2003		0		0		0		0		0		0
2002		7		0		1		3		0		0

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


Cumulative Total Return
	One Year			Five Year			Ten Year
SPDR Trust Series 1
Return Based on NAV		10.64	%		39.28	%		124.87	%
Return Based on Bid/Ask Price		10.66	%		39.20	%		125.33	%
S&P 500 Index		10.79	%		40.08	%		127.92	%


Average Annual Total Return
	One Year			Five Year			Ten Year
SPDR Trust Series 1
Return Based on NAV		10.64	%		6.85	%		8.44	%
Return Based on Bid/Ask Price		10.66	%		6.84	%		8.46	%
S&P 500 Index		10.79	%		6.97	%		8.59	%

(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.

SPDR Trust Series 1
Schedule of Investments
September 30, 2006


Common Stocks	Shares		Value
3M Co		3,588,591	$	267,062,942
Abbott Laboratories		7,310,805		355,012,691
ACE Ltd		1,547,690		84,705,074
ADC Telecommunications, Inc. *		554,282		8,314,230
Adobe Systems, Inc. *		2,846,960		106,618,652
Advanced Micro Devices, Inc. *		2,304,385		57,263,967
AES Corp. *		3,133,638		63,894,879
Aetna, Inc.		2,690,849		106,423,078
Affiliated Computer Services, Inc., (Class A) *		557,667		28,920,611
Aflac, Inc		2,373,456		108,609,347
Agilent Technologies, Inc. *		2,032,813		66,452,657
Air Products & Chemicals, Inc		1,066,833		70,805,706
Alberto-Culver Co., (Class B)		358,664		18,144,812
Alcoa, Inc		4,137,421		116,013,285
Allegheny Energy, Inc. *		774,125		31,096,601
Allegheny Technologies, Inc.		483,073		30,042,310
Allergan, Inc		726,718		81,835,714
Allied Waste Industries, Inc. *		1,148,167		12,939,842
Allstate Corp		3,022,527		189,603,119
ALLTEL Corp		1,851,891		102,779,950
Altera Corp. *		1,704,230		31,323,747
Altria Group, Inc.		10,018,033		766,880,426
Amazon.com, Inc. *		1,465,560		47,073,787
Ambac Financial Group, Inc		500,464		41,413,396
Ameren Corp		971,331		51,276,563
American Electric Power Co., Inc		1,867,372		67,916,320
American Express Co		5,865,589		328,942,231
American International Group, Inc		12,435,584		823,981,796
American Power Conversion Corp		815,376		17,905,657
American Standard Cos., Inc		845,121		35,469,728
Ameriprise Financial, Inc		1,188,511		55,741,166
AmerisourceBergen Corp		992,367		44,854,988
Amgen, Inc. *		5,613,585		401,539,735
AmSouth Bancorp		1,638,704		47,587,964
Anadarko Petroleum Corp		2,187,526		95,879,265
Analog Devices, Inc		1,735,418		51,003,935
Anheuser-Busch Cos., Inc		3,679,235		174,800,455
Aon Corp		1,528,637		51,774,935
Apache Corp		1,567,729		99,080,473
Apartment Investment & Management Co., (Class A)		458,522		24,948,182
Apollo Group, Inc., (Class A) *		666,519		32,819,396
Apple Computer, Inc. *		4,047,774		311,800,031
Applera Corp. — Applied Biosystems Group		880,767	$	29,162,195
Applied Materials, Inc		6,552,914		116,183,165
Archer-Daniels-Midland Co		3,115,120		118,000,746
Archstone-Smith Trust		1,011,121		55,045,427
Ashland, Inc		337,565		21,529,896
AT&T, Inc.		18,585,601		605,147,169
Autodesk, Inc. *		1,094,675		38,072,797
Automatic Data Processing, Inc		2,655,816		125,726,329
AutoNation, Inc. *		696,452		14,555,847
Autozone, Inc. *		262,000		27,064,600
Avaya, Inc. *		2,192,510		25,082,314
Avery Dennison Corp		449,649		27,055,380
Avon Products, Inc		2,136,310		65,499,265
Baker Hughes, Inc		1,621,877		110,612,011
Ball Corp		494,307		19,994,718
Bank of America Corp		21,719,805		1,163,529,954
Bank of New York Co., Inc. (The)		3,673,242		129,518,513
Barr Pharmaceuticals, Inc. *		501,465		26,046,092
Bausch & Lomb, Inc		255,294		12,797,888
Baxter International, Inc		3,116,739		141,686,955
BB&T Corp		2,620,312		114,717,259
Bear Stearns Cos., Inc. (The)		573,688		80,373,689
Becton, Dickinson & Co		1,172,550		82,864,108
Bed Bath & Beyond, Inc. *		1,343,357		51,396,839
BellSouth Corp		8,689,545		371,478,049
Bemis Co., Inc		499,804		16,423,559
Best Buy Co., Inc		1,927,458		103,234,650
Big Lots, Inc. *		538,005		10,657,879
Biogen Idec, Inc. *		1,632,034		72,919,279
Biomet, Inc		1,173,643		37,779,568
BJ Services Co		1,542,104		46,463,594
Black & Decker Corp		367,224		29,139,224
Block (H&R), Inc		1,554,672		33,798,569
BMC Software, Inc. *		1,008,274		27,445,218
Boeing Co		3,805,751		300,083,466
Boston Properties, Inc		549,928		56,829,560
Boston Scientific Corp. *		5,780,602		85,495,104
Bristol-Myers Squibb Co		9,357,746		233,195,030
Broadcom Corp., (Class A) *		2,184,636		66,281,856
Brown-Forman Corp., (Class B)		394,475		30,236,509
Brunswick Corp		450,276		14,044,108
Burlington Northern Santa Fe Corp		1,733,064		127,276,220
C.R. Bard, Inc		492,985		36,973,875
CA, Inc		1,959,167		46,412,666
Campbell Soup Co		1,109,399		40,493,063
Capital One Financial Corp		1,442,452		113,463,274
Cardinal Health, Inc		1,938,767		127,454,543
Caremark Rx, Inc		2,040,901		115,657,860

(*) Non-income producing security

See accompanying notes to financial statements.

SPDR Trust Series 1
Schedule of Investments (continued)
September 30, 2006


Common Stocks	Shares		Value
Carnival Corp		2,139,987	$	100,643,589
Caterpillar, Inc		3,186,755		209,688,479
CBS Corp., (Class B)		3,676,748		103,573,991
CenterPoint Energy, Inc		1,471,120		21,066,438
Centex Corp		582,528		30,652,623
CenturyTel, Inc		545,813		21,652,402
Charles Schwab Corp. (The)		4,897,124		87,658,520
Chesapeake Energy Corp		1,806,200		52,343,676
Chevron Corp.		10,550,475		684,303,808
Chicago Mercantile Exchange Holdings, Inc		170,325		81,457,931
Chubb Corp		1,978,005		102,777,140
CIENA Corp. *		394,558		10,751,706
CIGNA Corp		527,734		61,386,019
Cincinnati Financial Corp		825,777		39,686,843
Cintas Corp		653,570		26,685,263
Circuit City Stores, Inc.		721,825		18,125,026
Cisco Systems, Inc. *		29,211,203		671,857,669
CIT Group, Inc		947,425		46,073,278
Citigroup, Inc		23,655,604		1,174,973,851
Citizens Communications Co		1,557,634		21,869,181
Citrix Systems, Inc. *		866,830		31,387,914
Clear Channel Communications, Inc		2,394,087		69,069,410
Clorox Co		712,257		44,872,191
CMS Energy Corp. *		1,046,524		15,111,807
Coach, Inc. *		1,831,159		62,991,870
Coca-Cola Co. (The)		9,763,022		436,211,823
Coca-Cola Enterprises, Inc		1,437,833		29,950,061
Colgate-Palmolive Co		2,449,807		152,133,015
Comcast Corp., (Class A) *		10,045,544		370,178,296
Comerica, Inc		772,354		43,962,390
Commerce Bancorp, Inc		870,115		31,941,922
Compass Bancshares, Inc		615,886		35,093,184
Computer Sciences Corp. *		896,237		44,023,161
Compuware Corp. *		1,815,300		14,141,187
Comverse Technology, Inc. *		957,650		20,532,016
ConAgra Foods, Inc		2,462,694		60,286,749
ConocoPhillips		7,854,356		467,569,813
Consol Energy, Inc		869,448		27,587,585
Consolidated Edison, Inc		1,164,061		53,779,618
Constellation Brands, Inc., (Class A) *		935,036		26,910,336
Constellation Energy Group, Inc		846,303		50,101,138
Convergys Corp. *		663,608		13,703,505
Cooper Industries Ltd., (Class A)		435,857		37,143,734
Corning, Inc. *		7,414,783		180,994,853
Costco Wholesale Corp		2,245,229		111,542,977
Countrywide Financial Corp		2,892,285		101,345,666
Coventry Health Care, Inc. *		760,140		39,162,413
CSX Corp		2,109,406		69,251,799
Cummins, Inc		251,445		29,979,787
CVS Corp		3,895,503	$	125,123,556
Danaher Corp		1,125,465		77,285,682
Darden Restaurants, Inc		701,316		29,784,891
Dean Foods Co. *		647,316		27,200,218
Deere & Co		1,123,712		94,290,674
Dell, Inc. *		10,812,417		246,955,604
Devon Energy Corp		2,097,015		132,426,497
Dillard’s, Inc., (Class A)		292,216		9,564,230
Disney (Walt) Co. (The)		9,988,151		308,733,747
Dollar General Corp		1,501,250		20,462,038
Dominion Resources, Inc		1,689,051		129,195,511
Dover Corp		965,648		45,810,341
Dow Chemical Co		4,585,174		178,730,083
Dow Jones & Co., Inc		280,174		9,397,036
D.R. Horton, Inc		1,289,451		30,882,351
DTE Energy Co		843,429		35,010,738
Du Pont (E.I.) de Nemours		4,384,907		187,849,416
Duke Energy Corp		5,998,128		181,143,466
Dynegy, Inc., (Class A) *		1,756,637		9,731,769
ETRADE Financial Corp.		2,028,617		48,524,519
Eastman Chemical Co		387,292		20,921,514
Eastman Kodak Co		1,362,121		30,511,510
Eaton Corp		714,830		49,216,045
eBay, Inc. *		5,623,832		159,491,876
Ecolab, Inc		864,321		37,010,225
Edison International		1,544,787		64,324,931
El Paso Corp		3,310,881		45,160,417
Electronic Arts, Inc. *		1,457,257		81,140,070
Electronic Data Systems Corp		2,467,684		60,507,612
Embarq Corp		704,378		34,070,764
EMC Corp. *		11,262,286		134,922,186
Emerson Electric Co		1,949,867		163,515,847
Entergy Corp		986,368		77,163,569
EOG Resources, Inc		1,151,789		74,923,874
Equifax, Inc		614,316		22,551,540
Equity Office Properties Trust		1,761,053		70,019,467
Equity Residential Properties Trust		1,379,458		69,772,986
Estee Lauder Cos., Inc. (The) (Class A)		565,832		22,820,005
E.W. Scripps Co. (The), (Class A)		404,083		19,367,698
Exelon Corp		3,180,842		192,568,175
Express Scripts, Inc. *		655,346		49,472,070
Exxon Mobil Corp		28,433,797		1,907,907,779
Family Dollar Stores, Inc		736,039		21,521,780
Fannie Mae		4,607,197		257,588,384
Federated Department Stores, Inc		2,634,129		113,820,714
Federated Investors, Inc., (Class B)		399,449		13,505,371

(*) Non-income producing security

See accompanying notes to financial statements.

SPDR Trust Series 1
Schedule of Investments (continued)
September 30, 2006


Common Stocks	Shares		Value
FedEx Corp		1,451,496	$	157,748,585
Fifth Third Bancorp		2,648,173		100,842,428
First Data Corp		3,635,546		152,692,932
First Horizon National Corp		597,241		22,701,130
FirstEnergy Corp		1,569,953		87,697,575
Fiserv, Inc. *		835,897		39,362,390
Fisher Scientific International, Inc. *		586,181		45,862,801
Fluor Corp		416,865		32,052,750
Ford Motor Co		8,929,172		72,237,001
Forest Laboratories, Inc. *		1,546,337		78,260,116
Fortune Brands, Inc		694,645		52,174,786
FPL Group, Inc		1,924,324		86,594,580
Franklin Resources, Inc		799,358		84,532,108
Freddie Mac		3,288,770		218,144,114
Freeport-McMoran Copper & Gold, Inc., (Class B)		941,152		50,125,756
Freescale Semiconductor, Inc. *		1,946,234		73,976,354
Gannett Co., Inc		1,129,058		64,164,366
Gap, Inc. (The)		2,616,240		49,577,748
General Dynamics Corp		1,921,892		137,742,000
General Electric Co		49,491,460		1,747,048,538
General Mills, Inc		1,689,619		95,632,435
General Motors Corp		2,681,589		89,189,650
Genuine Parts Co		819,883		35,361,554
Genworth Financial, Inc., (Class A)		2,188,850		76,631,638
Genzyme Corp. *		1,239,153		83,605,653
Gilead Sciences, Inc. *		2,165,021		148,736,943
Golden West Financial Corp		1,273,219		98,356,168
Goldman Sachs Group, Inc		2,055,076		347,657,207
Goodrich Corp		585,356		23,718,625
Goodyear Tire & Rubber Co. (The) *		839,953		12,179,319
Google, Inc., (Class A) *		1,020,279		410,050,130
Halliburton Co		4,913,788		139,797,269
Harley-Davidson, Inc		1,292,196		81,085,299
Harman International Industries, Inc		318,381		26,565,711
Harrah’s Entertainment, Inc		873,601		58,033,314
Hartford Financial Services Group, Inc. (The)		1,442,854		125,167,584
Hasbro, Inc		843,706		19,194,312
HCA, Inc		2,030,538		101,303,541
Health Management Associates, Inc., (Class A)		1,141,234		23,851,791
Heinz (H.J.) Co.		1,588,417		66,602,325
Hercules, Inc. *		536,002		8,452,752
Hershey Co. (The)		850,015		45,433,302
Hess Corp		1,147,807		47,542,166
Hewlett-Packard Co		13,099,791		480,631,332
Hilton Hotels Corp.		1,852,972		51,605,270
Home Depot, Inc.		9,838,333		356,836,338
Honeywell International, Inc		3,936,638	$	161,008,494
Hospira, Inc. *		762,938		29,197,637
Humana, Inc. *		783,721		51,796,121
Huntington Bancshares, Inc		1,179,348		28,221,798
Illinois Tool Works, Inc		1,971,820		88,534,718
IMS Health, Inc		945,272		25,182,046
Ingersoll-Rand Co., (Class A)		1,565,745		59,466,995
Intel Corp		27,685,813		569,497,173
International Business Machines Corp		7,278,507		596,400,864
International Flavors & Fragrances, Inc		373,847		14,781,910
International Game Technology		1,614,073		66,984,029
International Paper Co		2,170,493		75,164,173
Interpublic Group of Cos., Inc. *		2,043,718		20,232,808
Intuit, Inc. *		1,625,499		52,162,263
ITT Corp		876,369		44,931,439
J.C. Penney Co., Inc		1,116,976		76,389,989
JPMorgan Chase & Co		16,610,594		780,033,494
Jabil Circuit, Inc		847,887		24,224,132
Janus Capital Group, Inc		1,018,174		20,078,391
JDS Uniphase Corp. *		7,949,531		17,409,473
Johnson & Johnson		13,991,959		908,637,817
Johnson Controls, Inc		927,868		66,565,250
Jones Apparel Group, Inc.		541,757		17,574,597
Juniper Networks, Inc. *		2,691,315		46,505,923
KB HOME		364,357		15,958,837
Kellogg Co		1,160,205		57,453,352
KeyCorp		1,921,467		71,939,724
KeySpan Corp		827,926		34,060,876
Kimberly-Clark Corp.		2,184,304		142,766,109
Kimco Realty Corp.		1,008,332		43,227,193
Kinder Morgan, Inc		499,164		52,337,345
King Pharmaceuticals, Inc. *		1,149,562		19,577,041
KLA-Tencor Corp		947,158		42,120,116
Kohl’s Corp. *		1,565,003		101,599,995
Kroger Co. (The)		3,440,774		79,619,510
L-3 Communications Holdings, Inc		576,144		45,129,360
Laboratory Corp. of America Holdings *		594,325		38,969,890
Legg Mason, Inc		630,480		63,590,213
Leggett & Platt, Inc		864,413		21,636,257
Lehman Brothers Holdings, Inc		2,562,914		189,296,828
Lennar Corp., (Class A)		663,670		30,031,068
Lexmark International, Inc., (Class A) *		513,676		29,618,558
Lilly (Eli) & Co		4,687,199		267,170,343
Limited Brands, Inc		1,651,529		43,749,003
Lincoln National Corp		1,366,236		84,815,931
Linear Technology Corp		1,449,445		45,106,728

(*) Non-income producing security

See accompanying notes to financial statements.

SPDR Trust Series 1
Schedule of Investments (continued)
September 30, 2006


Common Stocks	Shares		Value
Liz Claiborne, Inc		498,625	$	19,700,674
Lockheed Martin Corp		1,684,415		144,960,755
Loews Corp		2,193,835		83,146,346
Louisiana-Pacific Corp		502,588		9,433,577
Lowe’s Companies, Inc.		7,410,353		207,934,505
LSI Logic Corp. *		1,858,266		15,274,947
Lucent Technologies, Inc. *		21,194,819		49,595,876
M&T Bank Corp		376,539		45,169,618
Manor Care, Inc		350,316		18,314,520
Marathon Oil Corp.		1,724,287		132,597,670
Marriott International, Inc., (Class A)		1,646,207		63,609,438
Marsh & McLennan Cos., Inc.		2,615,375		73,622,806
Marshall & Ilsley Corp		1,220,575		58,807,303
Masco Corp		1,889,559		51,811,708
Mattel, Inc		1,843,378		36,314,547
Maxim Integrated Products, Inc		1,520,523		42,681,081
MBIA, Inc		635,798		39,063,429
McCormick & Co., Inc.		628,879		23,884,824
McDonald’s Corp.		5,955,247		232,969,263
McGraw-Hill Cos., Inc. (The)		1,701,831		98,757,253
McKesson Corp.		1,451,573		76,526,929
MeadWestvaco Corp		860,782		22,819,331
Medco Health Solutions, Inc. *		1,443,270		86,754,960
MedImmune, Inc. *		1,211,279		35,381,460
Medtronic, Inc		5,492,512		255,072,257
Mellon Financial Corp		1,965,067		76,834,120
Merck & Co., Inc.		10,388,088		435,260,887
Meredith Corp		198,503		9,792,153
Merrill Lynch & Co., Inc		4,237,090		331,425,180
MetLife, Inc.		3,611,025		204,672,897
MGIC Investment Corp		414,687		24,868,779
Micron Technology, Inc. *		3,464,148		60,276,175
Microsoft Corp		41,312,623		1,129,073,987
Millipore Corp. *		253,237		15,523,428
Molex, Inc.		675,298		26,316,363
Molson Coors Brewing Co., (Class B)		272,090		18,747,001
Monsanto Co		2,575,679		121,082,670
Monster Worldwide, Inc. *		610,973		22,111,113
Moody’s Corp		1,162,344		75,994,051
Morgan Stanley		5,098,355		371,721,063
Motorola, Inc		11,750,018		293,750,450
Murphy Oil Corp.		896,651		42,635,755
Mylan Laboratories, Inc		1,037,634		20,887,572
Nabors Industries Ltd. *		1,498,764		44,588,229
National City Corp.		2,902,213		106,220,996
National Semiconductor Corp.		1,419,430		33,399,188
National-Oilwell Varco, Inc. *		828,555		48,511,895
Navistar International Corp. *		292,649	$	7,556,197
NCR Corp. *		862,963		34,069,779
Network Appliance, Inc. *		1,774,228		65,664,178
New York Times Co. (The), (Class A)		688,669		15,825,614
Newell Rubbermaid, Inc.		1,317,412		37,309,108
Newmont Mining Corp. (Holding Co.)		2,136,668		91,342,557
News Corp		11,251,803		221,097,929
Nicor, Inc		208,946		8,934,531
NIKE, Inc., (Class B)		897,563		78,644,470
NiSource, Inc		1,294,424		28,140,778
Noble Corp		650,380		41,741,388
Nordstrom, Inc		1,094,574		46,300,480
Norfolk Southern Corp		1,972,678		86,896,466
North Fork Bancorporation, Inc		2,213,116		63,383,642
Northern Trust Corp		878,648		51,339,403
Northrop Grumman Corp		1,635,420		111,323,039
Novell, Inc. *		1,612,979		9,871,431
Novellus Systems, Inc. *		631,637		17,471,079
Nucor Corp		1,476,380		73,066,046
NVIDIA Corp. *		1,676,888		49,619,116
Occidental Petroleum Corp		4,083,198		196,442,656
Office Depot, Inc. *		1,368,599		54,333,380
OfficeMax, Inc		336,552		13,711,128
Omnicom Group, Inc		809,889		75,805,610
Oracle Corp. *		19,318,588		342,711,751
PACCAR, Inc		1,203,960		68,649,799
Pactiv Corp. *		679,496		19,311,276
Pall Corp		592,679		18,260,440
Parametric Technology Corp. *		526,808		9,198,068
Parker-Hannifin Corp		568,669		44,202,641
Patterson Cos., Inc. *		657,925		22,112,859
Paychex, Inc.		1,583,868		58,365,536
Peoples Energy Corp.		182,015		7,398,910
Pepsi Bottling Group, Inc. (The)		640,813		22,748,862
PepsiCo, Inc.		7,865,453		513,299,463
PerkinElmer, Inc		620,985		11,755,246
Pfizer, Inc		34,872,402		988,981,321
PG&E Corp.		1,652,331		68,819,586
Phelps Dodge Corp		969,882		82,149,005
Pinnacle West Capital Corp		470,701		21,205,080
Pitney Bowes, Inc		1,076,401		47,759,912
Plum Creek Timber Co., Inc		873,967		29,749,837
PMC-Sierra, Inc. *		982,881		5,838,313
PNC Financial Services Group		1,409,190		102,081,724
PPG Industries, Inc		784,119		52,598,703

(*) Non-income producing security

See accompanying notes to financial statements.

SPDR Trust Series 1
Schedule of Investments (continued)
September 30, 2006


Common Stocks	Shares		Value
PPL Corp		1,803,029	$	59,319,654
Praxair, Inc		1,538,124		90,995,416
Principal Financial Group		1,325,353		71,940,161
Procter & Gamble Co		15,179,574		940,829,997
Progress Energy, Inc		1,196,739		54,308,016
Progressive Corp. (The)		3,729,047		91,510,813
ProLogis		1,166,139		66,539,891
Prudential Financial, Inc.		2,345,862		178,871,977
Public Service Enterprise Group, Inc		1,196,907		73,238,739
Public Storage, Inc		582,012		50,047,212
Pulte Homes, Inc.		1,016,300		32,379,318
QLogic Corp. *		765,398		14,466,022
QUALCOMM, Inc.		7,980,106		290,076,853
Quest Diagnostics, Inc.		771,826		47,204,878
Qwest Communications International, Inc. *		7,452,043		64,981,815
R.R. Donnelley & Sons Co		1,024,319		33,761,554
RadioShack Corp.		636,789		12,290,028
Raytheon Co		2,118,052		101,687,677
Realogy Corp. *		1,107,313		25,113,859
Regions Financial Corp		2,164,160		79,619,446
Reynolds American, Inc		810,903		50,251,659
Robert Half International, Inc		812,845		27,612,345
Rockwell Automation, Inc.		841,223		48,875,056
Rockwell Collins, Inc		817,137		44,811,793
Rohm & Haas Co		691,838		32,758,529
Rowan Cos., Inc		518,329		16,394,746
Ryder System, Inc		288,441		14,906,631
Sabre Holdings Corp.		626,464		14,652,993
SAFECO Corp		584,578		34,449,182
Safeway, Inc.		2,131,444		64,689,325
SanDisk Corp. *		929,743		49,778,440
Sanmina-SCI Corp. *		2,527,470		9,452,738
Sara Lee Corp		3,604,853		57,929,988
Schering-Plough Corp		7,049,316		155,719,390
Schlumberger Ltd		5,666,371		351,484,993
Sealed Air Corp		386,212		20,901,793
Sears Holdings Corp. *		396,113		62,621,504
Sempra Energy		1,233,227		61,969,657
Sherwin-Williams Co. (The)		525,344		29,303,688
Sigma-Aldrich Corp		317,278		24,008,426
Simon Property Group, Inc		1,063,236		96,350,446
SLM Corp.		1,975,116		102,666,530
Smith International, Inc		964,200		37,410,960
Snap-on, Inc.		276,841		12,333,267
Solectron Corp. *		4,337,625		14,140,658
Southern Co. (The)		3,531,909		121,709,584
Southwest Airlines Co		3,771,567		62,834,306
Sovereign Bancorp, Inc		1,779,151		38,269,538
Sprint Nextel Corp		14,178,117		243,154,707
St. Jude Medical, Inc. *		1,738,275		61,343,725
St. Paul Travelers Cos., Inc. (The)		3,314,088	$	155,397,586
Stanley Works (The)		343,946		17,145,708
Staples, Inc		3,460,233		84,187,469
Starbucks Corp. *		3,650,666		124,305,177
Starwood Hotels & Resorts Worldwide, Inc		1,033,953		59,131,772
State Street Corp. (a)		1,580,244		98,607,226
Stryker Corp		1,386,208		68,742,055
Sun Microsystems, Inc. *		16,648,813		82,744,601
Sunoco, Inc		631,247		39,257,251
SunTrust Banks, Inc		1,729,918		133,688,063
SUPERVALU, Inc		965,408		28,624,347
Symantec Corp. *		4,727,402		100,599,115
Symbol Technologies, Inc		1,195,732		17,768,578
Synovus Financial Corp		1,538,419		45,183,366
Sysco Corp		2,940,601		98,363,103
T. Rowe Price Group, Inc		1,263,793		60,472,495
Target Corp		4,103,712		226,730,088
TECO Energy, Inc		989,600		15,487,240
Tektronix, Inc		387,161		11,200,568
Tellabs, Inc. *		2,139,028		23,443,747
Temple-Inland, Inc		525,675		21,079,568
Tenet Healthcare Corp. *		2,233,748		18,182,709
Teradyne, Inc. *		937,860		12,342,238
Texas Instruments, Inc		7,415,218		246,555,998
Textron, Inc		627,728		54,926,200
Thermo Electron Corp. *		779,034		30,639,407
Tiffany & Co		675,219		22,417,271
Time Warner, Inc		19,343,850		352,638,385
TJX Cos., Inc. (The)		2,183,931		61,215,586
Torchmark Corp		491,400		31,012,254
Transocean, Inc. *		1,546,490		113,249,463
Tribune Co		908,619		29,730,014
TXU Corp		2,201,081		137,611,584
Tyco International Ltd		9,695,280		271,370,887
Tyson Foods, Inc., (Class A)		1,196,887		19,006,566
U.S. Bancorp		8,466,392		281,253,542
Union Pacific Corp		1,280,198		112,657,424
Unisys Corp. *		1,621,720		9,178,935
United Parcel Service, Inc., (Class B)		5,160,239		371,227,594
United States Steel Corp		594,014		34,262,728
United Technologies Corp		4,812,619		304,879,414
UnitedHealth Group, Inc		6,427,685		316,242,102
Univision Communications, Inc.,		1,204,190		41,351,885
UnumProvident Corp		1,630,349		31,612,467
UST, Inc.		775,655		42,529,164
V.F. Corp		417,437		30,452,029
Valero Energy Corp		2,927,857		150,696,800
VeriSign, Inc. *		1,160,230		23,436,646

(*) Non-income producing security

See accompanying notes to financial statements.

SPDR Trust Series 1
Schedule of Investments (continued)
September 30, 2006


Common Stocks	Shares		Value
Verizon Communications, Inc		13,884,324	$	515,524,950
Viacom, Inc., (Class B) *		3,430,495		127,545,804
Vornado Realty Trust		583,525		63,604,225
Vulcan Materials Co		475,831		37,233,776
W.W. Grainger, Inc		362,810		24,315,526
Wachovia Corp		7,652,014		426,982,381
Wal-Mart Stores, Inc		11,764,847		580,242,254
Walgreen Co		4,807,950		213,424,900
Washington Mutual, Inc		4,573,249		198,799,134
Waste Management, Inc		2,617,406		96,006,452
Waters Corp. *		495,486		22,435,606
Watson Pharmaceuticals, Inc. *		482,103		12,616,636
Weatherford International Ltd. *		1,653,732		68,993,699
WellPoint, Inc. *		2,963,538		228,340,603
Wells Fargo & Co		16,113,403		582,982,921
Wendy’s International, Inc.		555,266		37,202,822
Weyerhaeuser Co.		1,171,369		72,074,335
Whirlpool Corp		369,392	$	31,069,561
Whole Foods Market, Inc		659,809		39,212,449
Williams Cos., Inc. (The)		2,819,483		67,301,059
Windstream Corp		2,256,007		29,756,732
Wm. Wrigley Jr. Co		1,051,930		48,451,896
Wyeth		6,405,202		325,640,470
Wyndham Worldwide Corp. *		957,077		26,769,444
Xcel Energy, Inc		1,914,796		39,540,537
Xerox Corp. *		4,726,474		73,543,935
Xilinx, Inc		1,635,241		35,893,540
XL Capital Ltd		859,032		59,015,498
XTO Energy, Inc		1,733,248		73,021,738
Yahoo!, Inc. *		5,980,491		151,186,812
Yum Brands, Inc		1,308,155		68,089,468
Zimmer Holdings, Inc. *		1,180,964		79,715,070
Zions Bancorp		504,859		40,292,797
Total Common Stocks (Cost 64,993,201,567)			$	57,539,678,182

(*) Non-income producing security

(a) Affiliated Issuer. See table below for more information.


Security Description	Number of Shares Held at 9/30/05		Shares Purchased for the Year Ended 9/30/06		Shares Sold for the Year Ended 9/30/06		Number of Shares Held at 9/30/06		Income Earned for the Year Ended 9/30/06		Realized Loss on Shares sold during the Year Ended 9/30/06		Dividend Receivable at 9/30/06
State Street Corp. (Cost $96,337,534)		1,406,836		1,959,352		1,785,944		1,580,244	$	1,232,565	$	12,302,877	$	313,657

See accompanying notes to 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 AMEX 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, 2006, 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 no longer owned any of the issued and outstanding shares of common stock of DTCC (‘‘DTCC Shares’’), and the Trustee owned 5.19% 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, 2006, 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 NYSE (‘‘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 (3rd) 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* was created to hold 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. 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, 2006, 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 NYSE is closed, (b) for any period during which an emergency exists as a result of which disposal or evaluation of the Portfolio 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 The NASDAQ Stock Market, Inc. (‘‘NASDQ’’), 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 that the available float shares of one or more 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 Index Securities due to mergers, acquisitions, bankruptcies, or other market conditions, or if the issuers of such Index Securities fail to meet the criteria for inclusion in the S&P 500 Index. In 2006, there were 36 company changes to the S&P 500 Index. Ordinarily, whenever there is a change in shares outstanding or a change in an Index 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 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.

*	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.

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 five hundred (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, 2006, the five largest industry groups comprising the S&P 500 Index were: Diversified Financials (10.51%), Energy (9.82%), Capital Goods (8.60%), Pharmaceuticals & Biotechnology (7.96%) and Technology Hardware & Equipment (6.84%). 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 2006. 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
2005		1,248.29		2,148.15		3.00			1.86
2006		1,418.30		2,440.72		13.62			1.81

*	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 State Street Global Markets, LLC, an affiliate of the Trustee (‘‘SSGM’’), 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 Trustee on behalf of the Trust, the Sponsor and the Exchange have each received a sublicense from SSGM for the use of the S&P 500 Index and certain trade names and trademarks in connection with their rights and duties with respect to the Trust. The License Agreement may be amended without the consent of any of the Beneficial Owners of SPDRs. Currently, the License Agreement is scheduled to terminate on December 31, 2017, 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 Exchange, the Sponsor, SSGM, the Distributor, DTC, NSCC, any Authorized Participant, any Beneficial Owner of SPDRs or any other person is entitled to use any rights whatsoever under the foregoing licensing arrangements or to use the trademarks ‘‘Standard & Poor’s’’, ‘‘S&P’’, ‘‘S&P 500.’’ ‘‘Standard & Poor’s 500’’ or ‘‘500’’ or to use the S&P 500 Index except as specifically described in the License Agreement or sublicenses 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.

S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. S&P 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 RIGHTS LICENSED UNDER THE LICENSE AGREEMENT, OR FOR ANY OTHER USE. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND

EXPRESSLY DISCLAIMS ALL 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 S&P 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.

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 value of the S&P 500 Index is no longer calculated or available and a new index is substituted or the S&P 500 Index is replaced with a new index, unless such new index meets the requirements of the Exchange’s rules; or (c) such other event occurs or condition exists which, in the opinion of the Exchange, makes further dealings on the Exchange inadvisable. The Exchange also must halt trading if required intraday valuation information is not disseminated for longer than one Business Day.

SPDRs also are listed and traded on the Singapore Exchange Securities Trading Limited (‘‘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.

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.

TAX STATUS OF THE TRUST

For the fiscal year ended September 30, 2006, 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 ninety percent (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 ninety percent (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 fifteen percent (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, 2006 and ending on or before September 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 twenty-eight percent (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 Plan and/or IRA investments 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

As of February 1, 2007, ordinary operating expenses of the Trust accrue at an annual rate of 0.0945%. 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, 2008. Thereafter, the Trustee may discontinue this voluntary waiver policy. The Trustee’s fee waiver will be calculated after earnings credits are applied. The amount of the earnings credit will be equal to the Federal Funds Rate, as reported in nationally distributed publications, multiplied by each day’s daily cash balance in the Trust’s cash account, reduced by the amount of reserves for that account required by the Federal Reserve Board of Governors. Therefore, there is no guarantee that the Trust’s ordinary operating expenses will not exceed 0.0945% 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

It is difficult to estimate the annual dollar amount of brokerage commissions that might be incurred in connection with the Service during any fiscal year. The Trustee estimates that during fiscal year 2006, the approximate amount of annual brokerage commissions incurred in implementing the Service was less than $0.001 per SPDR.

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 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, 2006, and as of December 31, 2006, the NAV of the Trust was $57,585,884,975 and $63,997,103,292, 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. Effective November 1, 2006, the Trustee changed the method of computing the Adjustment Amount to the Trustee’s fee such that all income earned with respect to cash held for the benefit of the Trust is credited against the Trustee’s fee. The amount of the earnings credit will be equal to the Federal Funds Rate, as reported in nationally distributed publications, multiplied by each day’s daily cash balance in the Trust’s cash account, reduced by the amount of reserves for that account required by the Federal Reserve Board of Governors.

In addition, during the period from December 1, 2006 through December 31, 2006, the Trustee applied incremental cash balance credits of $5,918,238 against its base fee. The incremental cash balance credits were calculated and applied on a daily basis during that period.

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

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

and other assets and dividing the result by the total number of outstanding SPDRs. For the most recent NAV information, please go to www.spdretfs.com.

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, such evaluation is generally based on the closing sale price on that day (unless the Trustee deems such price inappropriate as a basis for evaluation) on the exchange which is deemed to be the principal market thereof or, if there is no such appropriate closing price on such exchange 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 there is no such closing price available, such evaluation shall generally be made by the Trustee in good faith based on 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.

As specified in the Trust Agreement, the Trustee may declare special dividends if the Trustee deems such action 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 deems such action otherwise advantageous to the Trust. The Trust Agreement also permits the Trustee 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 Trust Agreement permits the Trustee to 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 One Lincoln Street, Boston, Massachusetts 02111. 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, 2006 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 typically 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 AMEX. 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 Trust) through 12/31/06, the distribution relationships of high, low and closing prices over the same period, and distribution of bid/ask spreads for 2006. 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 12/31/06. The investor may wish to compare these ranges with the average bid/ask 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/ask 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/ask spread will widen in markets that are more volatile and narrow when markets are less volatile. Consequently, the investor should expect wider bid/ask 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 12/31/2006)

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—.25%		3		0.09	%		1,422		40.54	%		1,002		28.56	%
.25—.5%		342		9.75	%		680		19.38	%		854		24.34	%
.5—1%		1,287		36.69	%		734		20.92	%		887		25.29	%
1—1.5%		898		25.60	%		335		9.55	%		395		11.26	%
1.5—2%		494		14.08	%		178		5.07	%		198		5.64	%
2—2.5%		240		6.84	%		85		2.42	%		92		2.62	%
2.5—3%		121		3.45	%		36		1.03	%		34		0.97	%
3—3.5%		57		1.62	%		20		0.57	%		20		0.57	%
>3.5%		66		1.88	%		18		0.51	%		26		0.74	%
Total		3,508		100	%		3,508		100	%		3,508		100	%

Average Daily Range: 1.2575%

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—.25%		21		0.60	%		1,269		36.17	%		934		26.62	%
.25—.5%		347		9.89	%		764		21.78	%		907		25.86	%
.5—1%		1,149		32.75	%		772		22.01	%		905		25.80	%
1—1.5%		950		27.08	%		370		10.55	%		422		12.03	%
1.5—2%		525		14.97	%		146		4.16	%		175		4.99	%
2—2.5%		257		7.33	%		107		3.05	%		83		2.37	%
2.5—3%		128		3.65	%		43		1.23	%		43		1.23	%
3—3.5%		63		1.80	%		19		0.54	%		20		0.57	%
>3.5%		68		1.94	%		18		0.51	%		19		0.54	%
Total		3,508		100	%		3,508		100	%		3,508		100	%

Average Daily Range: 1.2919%

*	Source: Bloomberg

**	The first day of trading on the AMEX

Frequency Distribution of Discounts and Premiums for SPDR Trust:
Closing AMEX Price vs. Net Asset Value (NAV) as of 12/31/06*



Range		Calendar Quarter Ending 3/31/2006	Calendar Quarter Ending 6/30/2006	Calendar Quarter Ending 9/30/2006	Calendar Quarter Ending 12/31/2006	Calendar Year 2006	From 1/29/1993 through 12/31/2006
> 200	Days	—	—	—	—	—	—
Basis Points	%	—	—	—	—	—	—
150—200	Days	—	—	—	—	—	—
Basis Points	%	—	—	—	—	—	—
100—150	Days	—	—	—	—	—	1
Basis Points	%	—	—	—	—	—	0.0%
50—100	Days	—	—	—	—	—	20
Basis Points	%	—	—	—	—	—	0.6%
25—50	Days	1	2	1	1	5	185
Basis Points	%	1.6%	3.2%	1.6%	1.6%	2.0%	5.3%
0—25	Days	30	25	38	34	127	1501
Basis Points	%	48.4%	39.7%	60.3%	54.0%	50.6%	42.8%
Total Days	Days	31	27	39	35	132	1707
at Premium	%	50.0%	42.9%	61.9%	55.6%	52.6%	48.7%
Closing Price	Days	1	2	—	2	5	44
Equal to NAV	%	1.6%	3.2%	—	3.2%	2.0%	1.3%
Total Days	Days	30	34	24	26	114	1757
at Discount	%	48.4%	54.0%	38.1%	41.3%	45.4%	50.1%
0— -25	Days	29	29	22	26	106	1448
Basis Points	%	46.8%	46.0%	34.9%	41.3%	42.2%	41.3%
-25— -50	Days	1	3	2	—	6	254
Basis Points	%	1.6%	4.8%	3.2%	—	2.4%	7.2%
-50— -100	Days	—	2	—	—	2	52
Basis Points	%	—	3.2%	—	—	0.8%	1.5%
-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 86% of the time from 1/29/93
(the first day of trading on the AMEX) through 12/31/06.

* Source: American Stock Exchange LLC

SPDR BID/ASK SPREAD DISTRIBUTION (2006 Only)*


Range ($)	% of Total
0.01—0.05		80.68	%
0.05—0.10		13.67	%
0.10—0.15		3.36	%
0.15—0.20		1.30	%
0.20—0.25		0.55	%
0.25—0.50		0.43	%
> 0.50		0.02	%
Total		100.00	%

The price range of shares for 2006 was from $122.36 to $143.24; consequently, $0.10 was from 0.08% to 0.07% 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 12/31/06*



Range		Calendar Quarter Ending 3/31/2006	Calendar Quarter Ending 6/30/2006	Calendar Quarter Ending 9/30/2006	Calendar Quarter Ending 12/31/2006	Calendar Year 2006
>50	Days	—	—	—	—
Basis Points	%	—	—	—	—
25—50	Days	—	—	—	—
Basis Points	%	—	—	—	—
0—25	Days	27	24	31	24		106
Basis Points	%	43.5%	38.1%	49.2%	38.1%		42.2	%
Total Days	Days	27	24	31	24		106
at Premium	%	43.5%	38.1%	49.2%	38.1%		42.2	%
Closing Price	Days	—	1	1	4		6
Equal to NAV	%	—	1.6%	1.6%	6.3%		2.4	%
Total Days	Days	35	38	31	35		139
at Discount	%	56.5%	60.3%	49.2%	55.6%		55.4	%
0— -25	Days	35	38	31	35		139
Basis Points	%	56.5%	60.3%	49.2%	55.6%		55.4	%
-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⁾
as of 12/31/06*

Cumulative Total Return


	1 Year			5 Year			10 Year
SPDR Trust Series 1
Return Based on NAV		15.65	%		34.27	%		121.59	%
Return Based on Bid/Ask Price		15.74	%		35.16	%		122.20	%
S&P 500 Index		15.79	%		35.03	%		124.47	%

Average Annual Total Return


	1 Year			5 Year			10 Year
SPDR Trust Series 1
Return Based on NAV		15.65	%		6.07	%		8.28	%
Return Based on Bid/Ask Price		15.74	%		6.21	%		8.31	%
S&P 500 Index		15.79	%		6.19	%		8.42	%

(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.

*	Source: American Stock Exchange LLC

GLOSSARY


	Page
‘‘1933 Act’’		56
‘‘10 Basis Point Limit’’		9
‘‘Additional Cash Deposit’’		35
‘‘Adjustment Amount’’		60
‘‘Adjustment Day’’		46
‘‘AMEX’’		4
‘‘Balancing Amount’’		47
‘‘Beneficial Owners’’		37
‘‘Business Day’’		3
‘‘Cash Component’’		5
‘‘Cash Redemption Payment’’		39
‘‘Closing Time’’		34
‘‘CNS’’		5
‘‘Code’’		10
‘‘Creation Units’’		4
‘‘Depository Agreement’’		38
‘‘Distributor’’		4
‘‘Dividend Equivalent Payment’’		5
‘‘Dividend Payment Date’’		61
‘‘DTC’’		10
‘‘DTCC’’		33
‘‘DTCC Shares’’		33
‘‘DTC Cut-Off Time’’		42
‘‘DTC Participants’’		37
‘‘ERISA’’		55
‘‘Evaluation Time’’		1
‘‘Ex-Dividend Date’’		61
‘‘Excess Cash Amounts’’		40
‘‘Exchange’’		4
‘‘Index Securities’’		3
‘‘Indirect Participants’’		37
‘‘IRA’’		55
‘‘IRS’’		53
‘‘License Agreement’’		i
‘‘Misweighting’’		44
‘‘Misweighting Amount’’		44
‘‘NASDAQ’’		43
‘‘NAV’’		3
‘‘NAV Amount’’		46
‘‘NSCC Business Day’’		14
‘‘NSCC’’		5
‘‘NYSE’’		3
‘‘Participant Agreement’’		5
‘‘Participating Party’’		5
‘‘Plans’’		55
‘‘Portfolio’’		3
‘‘Portfolio Deposit’’		5
‘‘Portfolio Deposit Amount’’		47
‘‘Portfolio Securities’’		3
‘‘Record Date’’		61
‘‘Request Day’’		46
‘‘S&P’’		3
‘‘S&P 500 Index’’		3
‘‘SEC’’		5
‘‘Service’’		10
‘‘SGX’’		51
‘‘SPDRs’’		3
‘‘SPDR Clearing Process’’		5
‘‘Sponsor’’		3
‘‘SSGM’’		50
‘‘Transaction Fee’’		9
‘‘Transmittal Date’’		33
‘‘Trust’’		3
‘‘Trust Agreement’’		3
‘‘Trustee’’		3
‘‘Weighting Analysis’’		44

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
100 F Street, N.E., Washington, D.C. 20549
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 26, 2007




                       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.A11 Code of Ethics dated & effective December, 2006.

          Ex-99.A4.1 Sublicense Agreement.

          Ex-99.A4.2 Sublicense 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, 2006.















                                   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 26th day of January, 2007.






                                           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            President of PDR Services LLC*
-------------------------
Clifford J. Weber




/s/ Scott Ebner                  Vice President of PDR Services LLC
-------------------------
Scott Ebner





----------
*    The 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.A11   -- Code of Ethics dated & effective December 2006.


4. EX-99.A4.1  -- Sublicense Agreement.

5. EX-99.A4.2  -- Sublicense Agreement.




                                                                   Exhibit 99.C1



                                                         January 26, 2007


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. 17 to the Trust's registration statement ("Post-Effective
Amendment No. 17") 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. 17 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. 17 and to the use of our name where it appears in Post-Effective
Amendment No. 17 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. 17 to the registration statement on Form S-6 of our
report dated November 20, 2006 relating to the September 30, 2006 financial
statements and financial highlights appearing in the September 30, 2006 Annual
Report to Unitholders 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 24, 2007



                                                                       Ex.99.A11

Effective December, 2006

                              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 1 (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 LLC ("Amex") and as such is subject to the American Stock Exchange LLC
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.




                                                         AMERICAN STOCK EXCHANGE



                                                                 CODE OF CONDUCT












 DECEMBER 2006





                                TABLE OF CONTENTS


I. INTRODUCTION AND APPLICABILITY..............................................2


II. COMPLIANCE WITH THE CODE OF CONDUCT.......................................4


III. WAIVER REQUESTS...........................................................5


IV. COMPLIANCE WITH LAWS, RULES AND REGULATIONS................................6


V. CONFLICTS OF INTEREST.......................................................7


VI. INFORMATION DISCLOSURE....................................................10


VII. LEGAL PROCEEDINGS.........................................................1


VIII. OUTSIDE EMPLOYMENT AND ACTIVITIES.......................................12


IX. SECURITY ACCOUNTS, POSITIONS, AND TRANSACTIONS ...........................14


X. BUSINESS GIFTS, GRATUITIES, AND COURTESIES.................................18


XI. CODE OF CONDUCT ENFORCEMENT AND DISCIPLINE................................20


XII. INTERPRETATIONS..........................................................21


XIII. AVAILABILITY............................................................22


XIV. DEFINITIONS..............................................................23








                        I. INTRODUCTION AND APPLICABILITY

Amex(R) is a self-regulatory organization that operates a securities market. We
expect Amex members, member organizations and their associated persons and
employees (collectively "members") to adhere to a code of ethics, conduct and
applicable rules in order to bring about a high level of investor confidence in
the securities industry. When Amex members fail to follow ethical and other
applicable standards and violate industry rules, we take appropriate
disciplinary action.

The Amex is a private institution. However, given our role as a self-regulatory
organization, we serve a significant public interest in the capital formation
and risk transfer processes and, consequently, are highly regulated. Our
employees, officers, governors and committee members (collectively, "Amex
Associated Persons") must conduct themselves in a manner that commands the
respect and confidence of both the securities industry and the public. Amex
Associated Persons cannot merely refrain from improper activity; they must also
be careful to avoid situations that could create even an appearance of
impropriety. To help ensure that our integrity, credibility, and reputation for
fair dealing are not compromised, the Board of Governors has adopted this Code
of Conduct to provide guidance to Amex Associated Persons and to set standards
for appropriate conduct.

The Code of Conduct describes ethical standards to be observed by all Amex
Associated Persons. 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 Amex
Associated Persons 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 Amex Associated Persons and to the employees,
officers, governors and/or directors and committee members of Amex's subsidiary
or affiliated companies. Amex Associated Persons must comply with the provisions
of the Code of Conduct.

The Code of Conduct imposes on Amex Associated Persons standards that supplement
applicable legal requirements including, for example, federal and state laws
governing such areas as securities, copyright and antitrust. In addition, some
Amex Associated Persons 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 subsidiaryor affiliated companies. All
references herein to "Amex Associated Persons" encompass all full-time and
temporary employees, officers, governors and/or directors and committee members,
including those of Amex's subsidiary and affiliated companies.


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











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                     II. COMPLIANCE WITH THE CODE OF CONDUCT


All Amex Associated Persons 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 Amex Associated Person, up to and including
immediate termination of employment or service. Disciplinary actions taken for
violations of the Code of Conduct are not subject to corrective counseling.

When hired or elected, each Amex Associated Person must certify, as a condition
of employment or service, that he has received, read, understands, and agrees to
comply with the Code of Conduct. Once every year, each Amex Associated Person
must certify, as a condition of continued employment or service, 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."










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                              III. WAIVER REQUESTS


Any waiver of this Code of Conduct for executive officers and Governors must be
granted only by the Board of Governors of the Amex.

Any waiver of this Code for any other Amex Associated Persons will be granted by
the General Counsel, Senior Vice President for Human Resources and the Amex
Associated Person's supervisor (or next higher level officer).














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                 IV. COMPLIANCE WITH LAWS, RULES AND REGULATIONS



GENERAL

Obeying the law, both in letter and in spirit, and behaving in a manner
consistent with the values of the Amex are critical to its reputation and
continued success. All Amex Associated Persons are expected to conduct all
business and affairs in full compliance with applicable laws, rules and
regulations, and shall encourage and promote such behavior for themselves and
other Amex Associated Persons.

The Code of Conduct imposes on Amex Associated Persons standards that supplement
applicable legal requirements including, for example, federal and state laws
governing such areas as securities, copyright and antitrust. In addition, some
Amex Associated Persons are required to comply with ethical codes applicable to
their professions (e.g., accountants and attorneys).

FEDERAL SECURITIES LAWS

The Amex must comply, and enforce compliance by its members and Amex Associated
Persons, with the Exchange Act of 1934, and the rules and regulations
promulgated thereunder (the "Exchange Act").

ANTITRUST LAWS

Amex believes that vigorous competition is in the best interest of Amex, Amex
Associated Persons and the public. The antitrust laws were conceived and enacted
to help preserve private enterprise capitalism in America by promoting fair and
healthy competition. It is the firm policy of Amex to comply fully with the
spirit and letter of these laws.

Essentially, the antitrust laws prohibit activities which constitute
unreasonable restraint of trade, unfair trade practices and other
anti-competitive practices which restrict or lessen competition, including:

o  Creation of, or attempts to create, a monopoly;

o  Agreements among competitors to increase, decrease or stabilize prices; to
   divide territories or markets; to allocate customers; to limit the quality of
   products; or to limit production; and

o  Price discrimination and other predatory trade practices.


Any failure to comply with the antitrust laws can have grave consequences not
only for the Amex but for any Amex Associated Person who may be involved in a
violation. Any Amex Associated Person having any question concerning compliance
with the antitrust laws may contact the Amex Office of General Counsel either
directly, or through the Amex Associated Person's Department Director (or next
higher level officer).





                            V. CONFLICTS OF INTEREST

A. GENERAL PROVISION

All Amex Associated Persons 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. Amex Associated Persons 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 Amex Associated Persons
in achieving this end.

B. DISCLOSURE OF ACTUAL AND POTENTIAL CONFLICTS

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

3. An Amex Associated Person 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 Amex Associated Person 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

Amex Associated Persons 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 Amex Associated Person's position or authority with Amex; or

         b. Confidential or other information that is not generally available to
            the public or that the Amex Associated Person 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;

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

         d. Evasion of Amex accounting policies or controls.

5. Absent prior written disclosure and approval from his Executive Vice
President (or highest ranking officer in his department), an Amex Associated
Person also is prohibited from:

         a. Acting in any Amex matter with anyone with whom the Amex Associated
            Person 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 IX of the Code of
            Conduct.

D. ADDITIONAL POTENTIAL CONFLICTS

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

1. Is employed by a broker/dealer, any exchange other than that which employs
the Amex Associated Person, 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 Amex Associated Person'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 Amex Associated Person is to
be assigned or otherwise may be asked to work.

E. RELATIONSHIPS WITH THE SECURITIES AND EXCHANGE COMMISSION

Amex Associated Persons should be aware that the regulations governing employees
of the Securities and Exchange Commission ("SEC") restrict their relationships
with Amex Associated Persons. Amex Associated Persons should take care to ensure
that their relationships with employees of the SEC comply with such regulations.
Employees of the SEC are prohibited from soliciting or receiving gifts which
have more than an incidental value from any entity which they regulate,
including the Amex and its member firms. Specifically, SEC employees generally
may not accept gifts from Amex Associated Persons, with a few exceptions,
including: (1) food or refreshments offered at a meeting; (2) gifts given as a
result of personal relationships; (3) advertising materials of incidental value;
and (4) meals given as part of an educational program. Thus, Amex Associated
Persons should be careful when dealing with SEC employees to honor such
prohibitions. Nothing in this Code of Conduct shall prohibit any association or
gifts by or from Amex Associated Persons and SEC employees arising out of
familial relationships.

F.  FUTURE EMPLOYMENT

The Amex realizes that during an individual's service as an Amex Associated
Person, the Amex Associated Person may at times be considering a change in
employment status. Such employment discussions may involve regulated entities or
current or prospective vendors to the Amex. The Amex does not prohibit such
discussions or pursuits. However, during any period of time when an Amex
Associated Person is considering or discussing employment opportunities with a
regulated entity or vendor, that Amex Associated Person should consider himself
or herself to be affiliated with that entity and thus should recuse himself or
herself from acting in any Amex matter which involves that entity specifically,
and should reveal his or her affiliation before acting in any manner that could
influence any discussion or vote on a rule-making decision affecting such
entity.









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                           VI. INFORMATION DISCLOSURE

A.  GENERAL PROVISIONS

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

B.  SPECIFIC PROHIBITIONS

Amex Associated Persons 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 or highest ranking officer in his department). This
prohibition does not apply to information disclosed or discussed by Amex
Associated Persons 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 Associated Persons, 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 Amex Associated Persons other than to fulfill the business needs of
Amex. Amex Associated Persons are expected to comply with all corporate policies
relating to the handling of confidential or sensitive information (e.g.,
Information Security Policy and Information Technology Acceptable Use Policy).
An Amex Associated Person 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 Amex Associated Person's
Department Director (or next higher level officer).








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

3. No Amex Associated Person 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 or
highest ranking officer in his department. This provision does not apply to
proceedings initiated by Amex (e.g., disciplinary hearings).

4. No Amex Associated Person 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).














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                     VIII. 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 or highest ranking officer in his
            department;

         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. Except as provided in Section VIII.C.2, below, an employee may not serve as
an officer or director of any publicly traded company without the prior written
approval of the Amex Chief Executive Officer or his delegee (procedures for
seeking approval are described in the Code of Conduct General Procedures). The
decision of the Amex Chief Executive Officer (or his delegee) on the request
will be final and will be reported to the Audit Committee.

2. An employee who is also a member of the Amex Board may not serve as an
officer or director of any publicly traded company without the prior written
approval of the Amex Corporate Governance Committee. The decision of the
Corporate Governance Committee 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 public office without the prior
written approval of the Amex Associated Person's Executive Vice President
(procedures for seeking approval are described in the Code of Conduct General
Procedures). The decision of the Executive Vice President or highest ranking
officer in his department 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 VIII.B or
governed by Section VIII.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).







               IX. 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 nonpublic 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 IX.C.1. through C.4.,
above.

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 IX.E.2 or
IX.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 IX) 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 IX) 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 or highest ranking officer in his department. 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 IX, 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 IX.

G.  LIQUIDATION OF PROHIBITED INVESTMENTS

Except as provided by Section IX.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
Amex. If warranted by the facts and circumstances surrounding a violation,
additional disciplinary actions may be imposed against the employee, including
immediate termination of employment.

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 or highest ranking
officer in his department.











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                  X. 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 Amex Associated Person 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.

B. GENERAL PROVISIONS

1. Unsolicited non-cash business gifts or courtesies may be accepted only if the
Amex Associated Person will not appear to be improperly influenced. Business
gifts received may not exceed $100 in aggregate value from any person during a
calendar year. Amex Associated Persons must report business gifts and courtesies
they accept, as specified in the "Amex Code of Conduct General Procedures."

2. When conducting Amex business, Amex Associated Persons 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 Amex
Associated Person to pay for his own expenses, and the person with whom Amex is
conducting business may pay for these items. In such circumstances, the Amex
Associated Person 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, Amex Associated Persons 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 Amex Associated Person 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 Amex Associated Person 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 Amex
Associated Person or a member of an Amex Associated Person's immediate family.

2. A business gift, gratuity, or courtesy was received by a member of the Amex
Associated Person'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 Amex Associated
Persons through an Amex-sanctioned arrangement.

E. DISPOSITION OF IMPERMISSIBLE BUSINESS GIFTS, GRATUITIES, AND COURTESIES

If an Amex Associated Person 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 Amex Associated
Person in the performance of his duties, the Amex Associated Person'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 Amex
Associated Person 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.













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                 XI. CODE OF CONDUCT ENFORCEMENT AND DISCIPLINE


A.  REPORTING MISCONDUCT; INVESTIGATIONS

Amex Associated Persons who become aware of unreported or undisclosed suspected
violations of the Code of Conduct by other Amex Associated Persons are expected
to report such violations. Reporting procedures are described in the Code of
Conduct General Procedures, Section XI and the Procedures for Handling
Complaints Regarding Accounting, Internal Accounting Controls, or Audit Matters.
Amex Associated Persons who report conduct they reasonably believe constitutes
violations will be protected from retaliation, discrimination, and harassment
for having filed such a report. In addition, such Amex Associated Persons will
be provided with confidentiality to the extent possible. Failure to report
violations may subject the non-reporting Amex Associated Person to disciplinary
action.

When suspected violations are reported or discovered, an investigation will be
conducted, and findings reported to appropriate management. Investigatory
procedures are described in Code of Conduct General Procedures, Section XI and
Procedures for Handling Complaints Regarding Accounting, Internal Accounting
Controls, or Audit Matters. Amex Associated Persons 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 noncooperating Amex Associated Person to disciplinary action.

B.  DISCIPLINE

In the event that an Amex Associated Person is found to have violated the Code
of Conduct, management will impose appropriate sanctions. In assessing
sanctions, the Amex aims to treat all Amex Associated Persons fairly and
consistently. To achieve these goals with respect to disciplinary actions
imposed for Code of Conduct violations, management must consult with the Amex
Office of General Counsel whenever an Amex Associated Person 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, Office of General Counsel may require that more senior management
agree with the proposed action.














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                              XII. INTERPRETATIONS

The Amex Office of General Counsel is responsible for providing interpretations
of the Code of Conduct. Amex Associated Persons may contact the Office of
General Counsel either directly, or through their Department Director (or next
higher level officer), as specified in the Code of Conduct General Procedures.

Interpretive advice will be provided either orally or in writing, as deemed
appropriate by the Amex Office of General Counsel. The Office of General Counsel
may publish interpretations of general interest on AmexCentral, and such
published interpretations are binding upon Amex Associated Persons in the same
manner as the Code of Conduct. Published interpretations become effective and
binding upon their posting on AmexCentral with notice to Amex Associated
Persons. The effective date will be noted for interpretations posted after
January 1, 2005; if no effective date is indicated, an interpretation was
effective January 1, 2005, when the Amex Code of Conduct became effective.














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                               XIII. AVAILABILITY


The Amex Code of Conduct, and interpretations and procedures issued thereunder
will be maintained in electronic form on AmexCentral. Amendments to these
materials will be posted from time to time as deemed necessary by the Amex
General Counsel.

The Amex Code of Conduct will be provided to Amex Associated Persons in printed
form once each year. However, Code of Conduct interpretations and procedures
will not be maintained in printed form. Therefore, Amex Associated Persons
should use AmexCentral to ensure they are referencing the most current version
of the Code, interpretations, and procedures.














                        THIS SPACE IS INTENTIONALLY BLANK












                                XIV. DEFINITIONS


For purposes of the Code of Conduct the following terms shall have the following
meanings:

AMEX means the American Stock Exchange LLC, and all of its subsidiary or
affiliated companies.

AMEX MEMBER means any broker/dealer that has been admitted to, or applied for,
membership in the Amex. As used in the Code of Conduct, the term shall also
include any natural person associated with such a company.

AMEX ASSOCIATED PERSON means employees, officers, governors and committee
members of Amex.

BROKER/DEALER means any entity or person registered as a "broker" or "dealer,"
as those terms are defined in the Securities Exchange Act of 1934.

BUSINESS COURTESY means an item provided in conjunction with, and incidental to,
a meeting, seminar or conference that an Amex Associated Person 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 that is received from any Amex member,
Amex issuer, or any person with whom Amex transacts business in return for a
specific service.

DEPARTMENT DIRECTOR means a person with direct responsibility for the overall
operation of a Department, regardless of the person's title. Typically these
persons will be a Director, Vice President, or Senior Vice President.

DEPARTMENT DIRECTOR (OR NEXT HIGHER LEVEL OFFICER) means that an Amex Associated
Person who is a Department Director (or higher) must notify or get approval from
the person to whom he reports. Typically, this will require Department Directors
to go to their Vice President; Vice Presidents to go to their Senior Vice
President; and Senior Vice Presidents to go to their Executive Vice President.
For Amex Associated Persons at or above the Executive Vice President level,
disclosures must be made to (or approvals received from) the General Counsel of
the Amex.

GOVERNOR means an individual elected to the Amex Board of Governors.

IMMEDIATE FAMILY means an Amex Associated Person's parents, siblings, spouse,
children, mother-in-law, father-in-law, brother-in-law, sister-in-law,
son-in-law or daughter-in-law. The term also includes any other person who is
supported, directly or





indirectly, to a material extent by the Amex Associated Person.

ISSUER means any company that is listed, or has applied for listing, on any
market or market system operated by the Amex. As used in the Code of Conduct,
the term shall also include any natural person employed by such a company.

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

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

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














                        THIS SPACE IS INTENTIONALLY BLANK



                                                                      Ex-99.A4.1

                              SUBLICENSE AGREEMENT
                              --------------------
                        (SPDRs to Sponsor of SPDRs Trust)

         This Sublicense Agreement is entered into as of this 1st day of
November, 2005 (this "Sublicense Agreement"), by and among PDR SERVICES LLC
(formerly PDR Services Corporation), a Delaware limited liability company
("Sublicensee"), in its capacity as sponsor of the Standard & Poor's Depositary
Receipts ("SPDR") Trust, Series 1, a unit investment trust registered under the
Investment Company Act of 1940 and organized under the laws of the State of New
York (the "SPDRs Trust"), STATE STREET GLOBAL MARKETS, LLC, a Delaware limited
liability company ("Licensee"), and STANDARD & POOR'S, a division of The
McGraw-Hill Companies, Inc., a New York corporation ("S&P").

                              W I T N E S S E T H:
                              - - - - - - - - - -

         WHEREAS, pursuant to that certain License Agreement dated as of October
30, 1992, as amended (the "Original License Agreement"), and as further amended
and restated by Licensee and S&P on the date hereof (the "Restated License
Agreement"), S&P has granted Licensee a license to use the S&P Marks (as defined
in the Restated License Agreement) in connection with the issuance, exchange
trading, marketing and/or promotion of the specific Product described in
Appendix A attached hereto and incorporated herein;

         WHEREAS, in connection with the sponsorship of the SPDRs Trust,
Sublicensee wishes to use and refer to the S&P Marks;

         WHEREAS, Licensee, Sublicensee and the American Stock Exchange LLC, a
Delaware limited liability company ("AMEX"), have entered into (a) a Principal
Agreement, dated as of August 31, 2005 regarding, among other things, the
assignment of the License Agreement to Licensee and (b) a Marketing Agreement,
dated as of the date hereof (the "Marketing Agreement") regarding, among other
things, the appointment of Licensee as the exclusive marketing agent of the
SPDRs Trust; and




         WHEREAS, all capitalized and undefined terms used herein have the
meanings assigned to them in the Restated License Agreement.

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, pursuant to Section 1(e) of the
Restated License Agreement, the parties hereto agree as follows:

         1. Subject to the terms and conditions of the Restated License
Agreement, Licensee hereby grants to Sublicensee a non-exclusive and
non-transferable sublicense (which shall not be further sublicensable by
Sublicensee) to use the S&P Marks for the term of the Restated License Agreement
solely in connection with the exercise of its rights and the performance of its
duties as sponsor of the SPDRs Trust.

         2. This Sublicense Agreement shall terminate upon (a) a material breach
by Sublicensee of this Sublicense Agreement which remains uncured after
Sublicensee has received notice from Licensee or S&P in accordance with the
notice and cure periods provided in Section 6 below, (b) a material breach by
Sublicensee or AMEX of the Marketing Agreement which remains uncured after
fifteen days from the date on which Sublicensee or AMEX, as the case may be,
receives written notice of breach from Licensee, (c) Sublicensee no longer being
sponsor of the SPDRs Trust or (d) termination or expiration of the Restated
License Agreement.

         3. Sublicensee acknowledges that it has received and read a copy of the
Restated License Agreement. Sublicensee, on behalf of the SPDRs Trust, agrees to
be bound by all of the provisions therein imposing any obligations on the
Licensee but does not assume the obligations contained therein, except
Sublicensee does hereby assume (a) those obligations contained in Subsection
3(a) (payment to S&P of License Fees) and (b) the obligations in those
provisions of Subsection 1(b) that require Licensee to fund some or all the
Litigation Costs incurred by S&P in connection with S&P's initiation of
litigation against any securities market that is using the Exclusive S&P Marks
to trade a product similar to the Product and (c) the indemnification
obligations in Subsection 10(a) insofar as such obligations arise out of or
relate to the Product to be issued by the SPDRs Trust and described in Appendix
A hereto, provided, however, that for (a) (b) and (c), Sublicensee shall not be
required to make any payments whatsoever under this Sublicense Agreement or the
Restated License Agreement that are not reimbursable by the SPDRs



                                      -2-


Trust pursuant to the respective exemptive order from the U.S. Securities and
Exchange Commission granting relief, among other things, from Section
26(a)(2)(c) of the Investment Company Act of 1940, as amended.

         4. Sublicensee, on behalf of the SPDRs Trust, agrees that its
obligations under the Restated License Agreement pursuant to Section 3 hereof
are as a principal and shall be unaffected by any defense or claim that Licensee
may have against S&P.

         5. This Sublicense Agreement shall be construed in accordance with the
laws of New York State without giving effect to the principles of conflicts of
laws.

         6. In the event of a material breach of this Sublicense Agreement by
Sublicensee, before the Sublicense Agreement may be terminated in accordance
with Section 2(a) hereof, Sublicensee shall first have received both an Initial
Notice and a Final Notice and the notice period commencing upon receipt of the
Final Notice shall have expired. For purposes of this Sublicense Agreement, an
"Initial Notice" shall mean a written notice sent to Sublicensee in accordance
with the provisions of Section 7 hereof which shall specify the nature of the
alleged breach and will notify the Sublicensee that it has 15 days from receipt
of the Initial Notice to cure such breach; and a "Final Notice" shall mean a
written notice sent to Sublicensee in accordance with the provisions of Section
7 hereof notifying Sublicensee that the breach specified in the Initial Notice
has not been cured, and will notify Sublicensee that it has 15 days from receipt
of the Final Notice to cure such breach.

         7. All notices and other communications under this Sublicense shall be
(i) in writing, (ii) delivered by hand (with receipt confirmed in writing), by
registered or certified mail (return receipt requested), or by facsimile
transmission (with receipt confirmed in writing), to the address or facsimile
number, with respect to the Sublicensee, as set forth below, with respect to the




                                      -3-


Sublicensee, as set forth below, with respect to the Licensee and Dow Jones, as
set forth in the Restated License Agreement, or to such other address or
facsimile number as the parties shall specify by a written notice to the others,
and (iii) deemed given upon receipt.

                           If to PDR Services LLC, to:

                           Corporate Secretary
                           American Stock Exchange LLC
                           86 Trinity Place
                           New York, New York 10006
                           Fax: (212) 306-5496

                           with copies to:

                           Neal Wolkoff, Chairman and Chief Executive Officer
                           American Stock Exchange LLC
                           86 Trinity Place
                           New York, New York 10006
                           Fax: (212) 306-1152

                           Stuart I. Friedman
                           Friedman, Wittenstein & Hochman
                           101 East 52nd Street
                           New York, New York 10022
                           Fax: (212) 223-8391





                            [SIGNATURE PAGE FOLLOWS]




                                      -4-




         IN WITNESS WHEREOF, the parties hereto have executed this Sublicense
Agreement as of the date first set forth above.

                                    PDR SERVICES LLC

                                    By: /s/ Clifford J. Weber
                                        -----------------------------------
                                    Name: Clifford J. Weber
                                        -----------------------------------
                                    Its: Senior Vice President
                                        -----------------------------------




                                    STATE STREET GLOBAL MARKETS, LLC

                                    By: /s/ Vincent Manzi
                                        -----------------------------------
                                    Name: Vincent Manzi
                                        -----------------------------------
                                    Its: Vice President
                                        -----------------------------------




                                    STANDARD & POOR'S, a division of The
                                    McGRAW-HILL COMPANIES, INC.

                                    By: /s/ Robert A. Shakotko
                                        -----------------------------------
                                    Name: Robert A. Shakotko
                                        -----------------------------------
                                    Its: Managing Director, Index Services
                                        -----------------------------------





                 [Signature page to SPDRs Sublicense Agreement]








                       APPENDIX A TO SUBLICENSE AGREEMENT
                       ----------------------------------

                               PRODUCT DESCRIPTION

                 Standard & Poor's Depositary Receipts ("SPDRs")


         1.  Description of a SPDR
             ---------------------

         A SPDR(TM) is a security which gives the holder (buyer) an undivided
interest in a portfolio of securities held in an open-ended Unit Investment
Trust which is traded on a national securities market. SPDRs are currently
traded on the American Stock Exchange ("Exchange") in a manner similar to that
of ordinary listed equity securities and may be purchased or sold at any time
during the Exchange trading day. The trading symbol for SPDRs is SPY.

         2.  Underlying Index
             ----------------

         The Standard and Poor's 500 Composite Stock Price Index - the S&P 500 -
serves as the model for the underlying portfolio of stocks held by the Trustee
Bank. The S&P 500 is a broad-market index of 500 stocks. The composition and
weighting of securities held in the underlying stock portfolio closely mirror
that of the S&P 500, following specific investment rules as set forth in the
Prospectus. Accordingly, the price of a SPDR on the Exchange is expected to
closely track the price levels of the S&P 500 over time.

         3.  Dividends
             ---------

         A SPDR holder receives a quarterly "Dividend Equivalent Amount" of cash
corresponding to the cash dividends which accrue to the S&P 500 stocks in the
underlying portfolio, less Trust expenses.

         4.  SPDR Creation
             -------------

         SPDRs are created on Exchange trading days in "Creation Unit" block
sizes of 50,000 by the deposit of a portfolio of stocks together with a
specified cash amount, as described below in the section entitled "Creation
Unit".





         5.  SPDR Redemption
             ---------------

         SPDRs may be redeemed on Exchange trading days in "Creation Unit" block
sizes of 50,000 in exchange for the same portfolio of stocks and cash that
correspond to SPDR creations.

         6.  Creation Unit
             -------------

         A "Creation Unit" is a block of 50,000 SPDRs which corresponds to a
basket of securities designated by the Trustee to closely approximate the
composition and weighting of the S&P 500 on the day of the request for creation,
together with a specified Total Cash Amount Per Creation Unit. This specified
Total Cash Amount Per Creation Unit includes:

         (1) the "Dividend Equivalent Amount" reflecting the accrued dividends
         of the stocks on deposit with the Trustee, ordinarily accrued for
         stocks with ex-dividend dates from the third Friday in March, June,
         September, and December through and including the day of the request
         for creation or redemption, less accrued Trust expenses over the same
         period, plus

         (2) an adjusting dollar amount which assures that the total market
         value of the stock plus cash in the Creation Unit equals the Net Asset
         Value of the Trust per Creation Unit outstanding at the market close on
         the day of the request for creation or redemption.

         7.  Dividend Equivalent Amount
             --------------------------

         The Dividend Equivalent Amount is the cash amount to be paid by the
Trustee for each SPDR outstanding on SPDR record date. It includes a
proportional amount of cash corresponding to the regular cash dividends (less
accrued Trust expenses) for the stocks on deposit with the Trustee which have
gone ex-dividend during each quarterly accrual period beginning on the third
Friday of March, June, September, and December. A portion of the Dividend
Equivalent Amount may be characterized as a return of capital to reflect cash
amounts deposited through creations.





         8.  Trading Unit
             ------------

         SPDRs trade on the American Stock Exchange in round lots of 100, with
odd-lot trading permitted.

         9.  Price Quotations
             ----------------

         SPDR prices are quoted in dollars in decimal format.

         10. Dividend Settlement
             --------------------

         The ex-dividend date for the quarterly dividend equivalent payment for
SPDRs is the third Friday of March, June, September and December. Dividend
Equivalent Amounts will ordinarily be paid quarterly on the last business day in
April, July, October, and January to all SPDR holders of record as of the fourth
business day following the most recent ex-dividend date.

         11. Creation/Redemption Procedures with the Trustee
             -----------------------------------------------

         The shares of component stocks in a Creation Unit will be determined by
the Trustee on the evening preceding each trading day. Orders requesting the
creation or redemption of 50,000 SPDRs or multiples thereof for the underlying
basket of stock plus cash must be given before 4:00 p.m. NY time on any trading
day following designated procedures which will be available from the Sponsor.

         12. Position Limits
             ---------------

         There are no position limits on SPDRs.

         13. Customer Margin
             ---------------

         It is anticipated that SPDRs will be treated as equity securities for
margin purposes following the first 30 days in the customer's account.

         14. Trading Hours on the American Stock Exchange
             --------------------------------------------

         9:30 a.m. to 4:15 p.m. NY time, and available for the After-Hours
Trading Facility.




         15. Trading System
             --------------

         Specialist/Registered Trader.

         16. Clearing
             --------

         SPDRs are Exchange-traded equity securities cleared through the
National Securities Clearing Corporation (NSCC).

         17. Settlement
             ----------

         SPDR trades, as well as SPDR creation or redemption requests, settle in
three business days. SPDRs are non-certificated (book entry only) equity
securities held at The Depository Trust Company.

         18. Product Description
             -------------------

         Exchange Rule 1000, Commentary .01 requires delivery of a product
description to each customer purchasing SPDRs not later than the time a
confirmation of the first transaction is delivered to the purchaser.




                                                                      Ex-99.A4.2

                              SUBLICENSE AGREEMENT
                              --------------------
                   (SPDRs to Trustee on behalf of SPDRs Trust)

         This Sublicense Agreement is entered into as of this 1st day of
November, 2005 (this "Sublicense Agreement"), by and among STATE STREET BANK AND
TRUST COMPANY, a Massachusetts bank and trust company, in its capacity as
trustee ("Sublicensee") of the Standard & Poor's Depositary Receipts ("SPDR")
Trust, Series 1, a unit investment trust registered under the Investment Company
Act of 1940 and organized under the laws of the State of New York (the "SPDRs
Trust"), STATE STREET GLOBAL MARKETS, LLC, a Delaware limited liability company
("Licensee"), and STANDARD & POOR'S, a division of The McGraw-Hill Companies,
Inc., a New York corporation ("S&P").

                              W I T N E S S E T H:
                              - - - - - - - - - -

         WHEREAS, pursuant to that certain License Agreement dated as of October
30, 1992, as amended (the "Original License Agreement"), and as further amended
and restated by Licensee and S&P on the date hereof (the "Restated License
Agreement"), S&P has granted Licensee a license to (i) use the S&P 500 Index (as
defined in the Restated License Agreement) as the basis of the Product to
continue to be issued, sponsored, distributed and maintained by Licensee and
(ii) use and refer to the S&P Marks (as defined in the Restated License
Agreement) in connection with the issuance, exchange trading, marketing and/or
promotion of the specific Product described in Appendix A attached hereto and
incorporated herein;

         WHEREAS, in connection with the use of the S&P 500 Index as the basis
of the Product and the issuance of the Product by the SPDRs Trust and for
purposes ancillary thereto Sublicensee wishes to use and refer to the S&P 500
Index and the S&P Marks; and

         WHEREAS, all capitalized and undefined terms used herein have the
meanings assigned to them in the Restated License Agreement.




         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, pursuant to Section 1(e) of the
Restated License Agreement, the parties hereto agree as follows:

         1. Subject to the terms and conditions of the Restated License
Agreement, Licensee hereby grants to Sublicensee for the benefit of the SPDRs
Trust a non-exclusive and non-transferable sublicense (which shall not be
further sublicensable by Sublicensee) to use the S&P 500 Index and S&P Marks for
the term of the Restated License Agreement solely in connection with the use of
the S&P 500 Index as the basis for the Product and the issuance by the SPDRs
Trust of the Product described in Appendix A and for purposes ancillary thereto.
Such sublicense shall be royalty-free with respect to the parties hereto.

         2. This Sublicense Agreement shall terminate upon (a) a material breach
by Sublicensee of this Sublicense Agreement which remains uncured after fifteen
days from the date on which Sublicensee receives written notice of breach from
Licensee, (b) the expiration or termination of the SPDRs Trust or (c)
termination or expiration of the Restated License Agreement.

         3. Sublicensee acknowledges that it has received and read a copy of the
Restated License Agreement.

         4. This Sublicense Agreement shall be construed in accordance with the
laws of New York State without giving effect to the principles of conflicts of
laws.





                            [SIGNATURE PAGE FOLLOWS]




                                      -2-




         IN WITNESS WHEREOF, the parties hereto have executed this Sublicense
Agreement as of the date first set forth above.

                                    STATE STREET BANK AND TRUST
                                    COMPANY, AS TRUSTEE OF THE
                                    STANDARD & POOR'S DEPOSITARY
                                    RECEIPTS ("SPDR") TRUST, SERIES 1

                                    By: /s/ Gary L. French
                                        -----------------------------------
                                    Name: Gary L. French
                                        -----------------------------------
                                    Its: Senior Vice President
                                        -----------------------------------





                                    STATE STREET GLOBAL MARKETS, LLC

                                    By: /s/ Vincent Manzi
                                        -----------------------------------
                                    Name: Vincent Manzi
                                        -----------------------------------
                                    Its: Vice President
                                        -----------------------------------




                                    STANDARD & POOR'S, a
                                    division of The McGRAW-HILL
                                    COMPANIES, INC.

                                    By: /s/ Robert A. Shakotko
                                        -----------------------------------
                                    Name: Robert A. Shakotko
                                        -----------------------------------
                                    Its: Managing Director, Index Services
                                        -----------------------------------





                 [Signature page to SPDRs Sublicense Agreement]








                       APPENDIX A TO SUBLICENSE AGREEMENT
                       ----------------------------------

                               PRODUCT DESCRIPTION

                 Standard & Poor's Depositary Receipts ("SPDRs")
                 -----------------------------------------------


         1.  Description of a SPDR
             ---------------------

         A SPDR(TM) is a security which gives the holder (buyer) an undivided
interest in a portfolio of securities held in an open-ended Unit Investment
Trust which is traded on a national securities market. SPDRs are currently
traded on the American Stock Exchange ("Exchange") in a manner similar to that
of ordinary listed equity securities and may be purchased or sold at any time
during the Exchange trading day. The trading symbol for SPDRs is SPY.

         2.  Underlying Index
             ----------------

         The Standard and Poor's 500 Composite Stock Price Index - the S&P 500 -
serves as the model for the underlying portfolio of stocks held by the Trustee
Bank. The S&P 500 is a broad-market index of 500 stocks. The composition and
weighting of securities held in the underlying stock portfolio closely mirror
that of the S&P 500, following specific investment rules as set forth in the
Prospectus. Accordingly, the price of a SPDR on the Exchange is expected to
closely track the price levels of the S&P 500 over time.

         3.  Dividends
             ---------

         A SPDR holder receives a quarterly "Dividend Equivalent Amount" of cash
corresponding to the cash dividends which accrue to the S&P 500 stocks in the
underlying portfolio, less Trust expenses.

         4.  SPDR Creation
             -------------

         SPDRs are created on Exchange trading days in "Creation Unit" block
sizes of 50,000 by the deposit of a portfolio of stocks together with a
specified cash amount, as described below in the section entitled "Creation
Unit".






         5.  SPDR Redemption
             ---------------

         SPDRs may be redeemed on Exchange trading days in "Creation Unit" block
sizes of 50,000 in exchange for the same portfolio of stocks and cash that
correspond to SPDR creations.

         6.  Creation Unit
             -------------

         A "Creation Unit" is a block of 50,000 SPDRs which corresponds to a
basket of securities designated by the Trustee to closely approximate the
composition and weighting of the S&P 500 on the day of the request for creation,
together with a specified Total Cash Amount Per Creation Unit. This specified
Total Cash Amount Per Creation Unit includes:

         (1) the "Dividend Equivalent Amount" reflecting the accrued dividends
         of the stocks on deposit with the Trustee, ordinarily accrued for
         stocks with ex-dividend dates from the third Friday in March, June,
         September, and December through and including the day of the request
         for creation or redemption, less accrued Trust expenses over the same
         period, plus

         (2) an adjusting dollar amount which assures that the total market
         value of the stock plus cash in the Creation Unit equals the Net Asset
         Value of the Trust per Creation Unit outstanding at the market close on
         the day of the request for creation or redemption.

         7.  Dividend Equivalent Amount
             --------------------------

         The Dividend Equivalent Amount is the cash amount to be paid by the
Trustee for each SPDR outstanding on SPDR record date. It includes a
proportional amount of cash corresponding to the regular cash dividends (less
accrued Trust expenses) for the stocks on deposit with the Trustee which have
gone ex-dividend during each quarterly accrual period beginning on the third
Friday of March, June, September, and December. A portion of the Dividend
Equivalent Amount may be characterized as a return of capital to reflect cash
amounts deposited through creations.






         8.  Trading Unit
             ------------

         SPDRs trade on the American Stock Exchange in round lots of 100, with
odd-lot trading permitted.

         9.  Price Quotations
             ----------------

         SPDR prices are quoted in dollars in decimal format.

         10. Dividend Settlement
             -------------------

         The ex-dividend date for the quarterly dividend equivalent payment for
SPDRs is the third Friday of March, June, September and December. Dividend
Equivalent Amounts will ordinarily be paid quarterly on the last business day in
April, July, October, and January to all SPDR holders of record as of the fourth
business day following the most recent ex-dividend date.

         11. Creation/Redemption Procedures with the Trustee
             -----------------------------------------------

         The shares of component stocks in a Creation Unit will be determined by
the Trustee on the evening preceding each trading day. Orders requesting the
creation or redemption of 50,000 SPDRs or multiples thereof for the underlying
basket of stock plus cash must be given before 4:00 p.m. NY time on any trading
day following designated procedures which will be available from the Sponsor.

         12. Position Limits
             ---------------

         There are no position limits on SPDRs.

         13. Customer Margin
             ---------------

         It is anticipated that SPDRs will be treated as equity securities for
margin purposes following the first 30 days in the customer's account.

         14. Trading Hours on the American Stock Exchange
             --------------------------------------------

         9:30 a.m. to 4:15 p.m. NY time, and available for the After-Hours
Trading Facility.





         15. Trading System
             --------------

         Specialist/Registered Trader.

         16. Clearing
             --------

         SPDRs are Exchange-traded equity securities cleared through the
National Securities Clearing Corporation (NSCC).

         17. Settlement
             ----------

         SPDR trades, as well as SPDR creation or redemption requests, settle in
three business days. SPDRs are non-certificated (book entry only) equity
securities held at The Depository Trust Company.

         18. Product Description
             -------------------

         Exchange Rule 1000, Commentary .01 requires delivery of a product
description to each customer purchasing SPDRs not later than the time a
confirmation of the first transaction is delivered to the purchaser.