S&P Asks SEC to Block New Vanguard Viper Fund

Standard & Poor's has asked the Securities and Exchange Commission to stop Vanguard from rolling out its new Vipers exchange-traded fund that would track the S&P 500 index.

S&P and Vanguard have been locked in a trademark dispute since Vanguard first announced the creation of Vipers in May. In a lawsuit, S&P claims Vanguard's license to use the S&P 500 index does not cover Vipers. (Vanguard plans to launch as many as nine Vipers funds.) Vanguard claims Vipers are simply a new share class of its existing (VFINX Quote)Vanguard 500 Index and are covered under their current licensing agreement with S&P.

Unlike traditional mutual funds, exchange-traded funds are priced throughout the trading day and can be bought and sold like stocks. They have proven popular with many index-fund investors because of their low expense ratios and tax efficiency. Because of their unique structure, exchange-traded funds can't be offered without an SEC order exempting them from certain securities laws. This week, S&P filed a request for a public hearing on Vanguard's application for such an order. ...