The Securities and Exchange Commission has ok'd seven applications made by Barclay's Global to offer the first fixed income exchange-traded funds . The decision has been expected and was hinted at last Friday by SEC Chairman Harvey Pitt in his address to the Investment Company Institute General Membership Meeting last Friday.

The SEC promulgated word of its decision at a public meeting today. There will be a 25 day public comment period during which the SEC will listen to input on the decision. Barclays plans to offer the new products as early as this summer if no hurdles are raised during the comment period. Pitt also used the meeting as a platform to suggest that applications such as Barclays' be made more quickly. He cited the Commission's decade long experience with the process as a reason for a more generic approval process to be created.

One of the issues that Pitt said was a concern at the SEC was how the bond-ETFs would be arbitraged to keep any discount or premium to the fund's NAV within a narrow range.

The new bond ETFs will be based on six indices created by Lehman Brothers and one from Goldman Sachs. The Lehman indices are all based on Treasury issues and the Goldman index is a corporate debt index, according to a report made by Dow Jones. 

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