The Securities and Exchange Commission has taken action to authorize the industry’s first fixed income exchange-traded funds at an open meeting today. Until now, ETFs have been based only on equity indexes.

There will be a notice period of approximately 30 days, which should be followed by a final order issued by the SEC. Pending the completion of that process, the new ETFs are expected to be launched in late July.

The seven new fixed income ETFs were registered and will be managed by Barclays Global Fund Advisors, a subsidiary of Barclays Global Investors of London. The new iShares, which is what Barclays calls its ETFs, will be listed on the American Stock Exchange.

"We're pleased that the SEC has taken action on iShares fixed income exchange-traded funds," said Lee Kranefuss, CEO of BGI's individual investor business. "Institutional and individual investors have been anxious to have the benefits of exchange-traded funds in their bond portfolios. iShares fixed income funds will allow investors to purchase a basket of bonds with the ease of buying a stock, while diversifying their risks across a large group of bonds. The exchange trading feature will provide a transparent price at which everyone can buy and sell their bond portfolio."

Six of the new ETFs will be based on Lehman Brothers Bond idexes and the seventh will be based on a Goldman Sachs Bond index. The new ETFs are: iShares 1-3 Year Treasury Index Fund, iShares 7-10 Year Treasury Index Fund, iShares 20+ Year Treasury Index Fund, iShares Treasury Index Fund, iShares Lehman Government/Credit Index Fund, iShares Lehman Corporate Bond Fund, and iShares Goldman Sachs Corporate Bond Fund.

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