33586 Federal Register / Vol. 65, No. 101 / Wednesday, May 24, 2000 / Notices

1 15 U.S.C. 78s(b)(1).

2 17 CFR 240.19b–4.

3Securities Exchange Act Release No. 42543

(March 17, 2000), 65 FR 16433.

4The Trust has filed with the Commission an

Application for Orders (‘‘Application’’) under

Sections 6(c) and 17(b) of the Investment Company

Act of 1940 (‘‘1940 Act’’) as amended, for the

purpose of exempting the Trust from various

provisions of the 1940 Act and Amex Rules

thereunder (File No. 812–11598).

Organization (KEDO) and State

Department (Public Meeting)

(Contact: Donna Chaney, 301–415–

2644)

Week of June 19—Tentative

Tuesday, June 20, 2000

9:25 a.m. Affirmation Session (Public

Meeting) (If needed)

9:30 a.m. Briefing on Final Rule—Part

70—Regulating Fuel Cycle Facilities

(Public Meeting)

1:30 p.m. Briefing on Risk-Informed Part

50, Option 3 (Public Meeting)

Week of June 26—Tentative

There are no meetings scheduled for

the Week of June 26.

*THE SCHEDULE FOR COMMISSION

MEETINGS IS SUBJECT TO CHANGE

ON SHORT NOTICE. TO VERIFY THE

STATUS OF MEETINGS CALL

(RECORDING)—(301) 415–1292.

CONTACT PERSON FOR MORE

INFORMATION: Bill Hill (301) 415–

1661.

The NRC Commission Meeting

Schedule can be found on the Internet

at: http://www.nrc.gov/SECY/smj/

schedule.htm

This notice is distributed by mail to

several hundred subscribers; if you no

longer wish to receive it, or would like

to be added to it, please contact the

Office of the Secretary, Attn: Operations

Branch, Washington, D.C. 20555 (301–

415–1661). In addition, distribution of

this meeting notice over the Internet

system is available. If you are interested

in receiving this Commission meeting

schedule electronically, please send an

electronic message to wmh@nrc.gov or

dkw@nrc. gov.

Dated: May 19, 2000.

William M. Hill, Jr.,

Secy Tracking Officer, Office of the Secretary.

[FR Doc. 00–13151 Filed 5–22–00; 1:16 pm]

BILLING CODE 7590–01–M

NUCLEAR REGULATORY

COMMISSION

Indiana Michigan Power Company,

Donald C. Cook Nuclear Plant, Units 1

and 2; Notice of Correction to Biweekly

Notice of Issuance of Amendments to

Facility Operating Licenses

On May 17, 2000 (65 FR 31364), the

Federal Register published the

Biweekly Notice of Applications and

Amendments to Operating Licenses

Involving No Significant Hazards

Considerations. On page 31364, under

Indiana Michigan Power Company,

Docket Nos. 50–315 and 50–316, the

amendment number was incorrectly

noted. It should read, ‘‘Amendment

Nos.: 244 and 225.

Dated at Rockville, Maryland this 18th day

of May 2000.

For the Nuclear Regulatory Commission.

John F. Stang,

Senior Project Manager, Section 1, Project

Directorate III, Division of Licensing Project

Management, Office of Nuclear Reactor

Regulation.

[FR Doc. 00–13064 Filed 5–23–00; 8:45 am]

BILLING CODE 7590–01–P

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42786; File No. SR–Amex–

99–49]

Self-Regulatory Organizatons;

American Stock Exchange LLC; Order

Partially Approving Proposed Rule

Change Relating to Investment Series

of the iShares Trust Based on Foreign

Stock Indexes

May 15, 2000.

I. Introduction

On December 28, 1999, the American

Stock Exchange LLC (‘‘Amex’’ or

‘‘Exchange’’) filed with the Securities

and Exchange Commission (‘‘SEC’’ or

‘‘Commission’’), pursuant to Section

19(b)(1) of the Securities Exchange Act

of 1934 (‘‘Act’’) 1 and Rule 19b–4

thereunder,2 a proposed rule change

relating to listing and trading

investment series of the iShares trust

based on foreign stock indexes. The

proposed rule change was published for

comment in the Federal Register on

March 28, 2000.3 No comments were

received on the proposal. This order

approves the proposed rule change with

respect to the iShares S&P Europe 350

Index Fund and the iShares S&P/TSE 60

Fund.

II. Description of the Proposal

The Exchange proposes to list and

trade under Amex Rules 1000 et seq. the

following investment series (each a

‘‘Fund’’ and collectively, the ‘‘Funds’’)

of the iShares SM Trust 4 (‘‘Trust’’) based

on indexes (referred to herein as

‘‘Underlying Indices’’) comprised in

whole or part of equity securities issued

by foreign issuers as follows: (1) iShares

S&P Europe 350 Index Fund and (2)

iShares S&P/TSE 60 Fund. Amex Rules

1000A et seq. apply to Index Funds

Shares.

In addition to the Funds listed above,

the Trust’s 1940 Act exemptive

application requests that the exemptive

relief sought in the Application apply to

Funds (referred to herein as ‘‘Additional

Funds’’) based on the following indexes:

(1) S&P Euro Index; (2) Dow Jones

Global Media Sector Index; (3) Dow

Jones Global Pharmaceuticals Sector

Index; and (4) Dow Jones Global

Telecommunications Sector Index.

Funds on these indexes will not be the

subject of the Trust’s initial registration

statement, which will cover the iShares

S&P Europe 350 Index Fund and the

iShares S&P/TSE 60 Fund. The

Exchange proposes to list and trade the

Additional Funds, listed above, that are

the subject of the Trust’s 1940 Act

exemptive application after an effective

registration statement is in place for

those funds. All descriptions herein that

apply to the two proposed iShares

Funds also apply to the Additional

Funds.

A detailed description of each

Underlying Index for the Funds and the

Additional Funds, as prepared by the

compilers of the Underlying Indices, is

available in the Commission’s Public

Reference Room as Exhibit B. These

descriptions include information

regarding component selection criteria,

issue changes, index maintenance,

index availability, index description,

and industry group distribution by

market capitalization.

‘‘Passive’’ or Indexing Investment

Approach

The investment objective of each

Fund is to provide investment results

that, before expenses, correspond

generally to the price and yield

performance of companies in the

Underlying Index. In seeking to achieve

the respective investment objective of

each Fund, Barclays Global Fund

Advisors, (‘‘the Advisor’’), will utilize

some variety of ‘‘passive’’ or indexing

investment approach. Certain Funds

will use a replication strategy by which

an index fund seeks to match an

Underlying Index’s performance, before

fees and expenses, by buying and selling

all of the Underlying Index’s securities

in the same proportion as they are

reflected in the Underlying Index. These

funds reserve the right not to invest in

every security in the Underlying Index

if the Adviser believes it is not practical

to do so under the circumstances. It is

anticipated that the iShares S&P/TSE 60

Fund will use a replication strategy.

Federal Register / Vol. 65, No. 101 / Wednesday, May 24, 2000 / Notices 33587

5 In order for a Fund to qualify for tax treatment

as a regulated investment company, it must meet

several requirements under the Internal Revenue

Code. One requirement that as of the close of each

quarter of the Fund’s taxable year: (1) At least 50

percent of the market value of the Fund’s total

assets must be represented by cash items, U.S.

government securities, securities of other regulated

investment companies and other securities, with

such other securities limited for purposes of this

calculation in respect of any one issuer to an

amount not greater than 5 percent of the value of

the Fund’s assets and not greater than 10 percent

of the outstanding voting securities of such issuer,

and (2) not more than 25 percent of the value of

its total assets may be invested in the securities of

any one issuer, or of two or more issuers that are

controlled by the fund (within the meaning of

Section 851(b)(4)(B) of the Internal Revenue Code)

and that are engaged in the same or similar trades

or businesses or related trades or business (other

than U.S. government securities or the securities of

other regulated investment companies).

6 iShares cannot be redeemed individually but

must be redeemed in Creation Unit Aggregations

applicable to the specific Fund.

Representative Portfolio Sampling

Approach

Other Funds may not hold all or most

of the securities in the Underlying Index

(‘‘Component Securities’’). This may be

the case, for example, when there are

substantial costs involved in compiling

an entire Underlying Index basket that

contains scores of Component Securities

or, in certain instances, when a

Component Security is illiquid. In cases

such as these, a Fund will attempt to

hold a representative sample of the

Component Securities in the Underlying

Index, which will be selected by the

Adviser utilizing quantitative analytical

models in a strategy known as

‘‘representative portfolio sampling.’’ It is

anticipated that the iShares S&P Europe

350 Index Fund will use this technique.

No Fund will concentrate i.e., hold

more than 25% of its assets in the stocks

of a single industry or a group of

industries) its investments in issuers of

one more more particular industries,

except that a Fund will concentrate to

the extent that its Underlying Index

concentrates in the stocks of such

particular industry or industries.

Under this strategy, each security is

considered for inclusion in a Fund

based on its contribution to certain

capitalization, industry, and

fundamental investment characteristics.

The Adviser will seek to construct the

portfolio of a Fund so that it will have

capitalization, industry and

fundamental investment characteristics

that perform like those in the

corresponding Underlying Index. From

time to time, adjustments will be made

in the portfolio of each Fund in

accordance with changes in the

composition of the Underlying Index, or

to maintain compliance as a ‘‘regulated

investment company’’ under the

Internal Revenue Code.5 Certain of these

Funds may also hold some securities

that are not components of the relevant

Underlying Index if the Adviser decides

it is appropriate in view of such Funds’

investment objectives and investment or

tax constraints. If the representative

portfolio sampling technique is used, a

Fund will not be expected to track its

Underlying Index with the same degree

of accuracy as would an investment

vehicle that invested in every

Component Security of the Underlying

Index with the same weightings as the

Underlying Index. It is anticipated that,

over time, the Adviser in such case will

be able to employ representative

portfolio sampling techniques such that

the expected tracking error of a Fund

relative to the performance of its

Underlying Index will be less than 5

percent.

Procedures for Creation and

Redemption of iShares of the Funds

Procedures for the creation and

redemption of iShares of the proposed

Funds are similar to procedures for

creation and redemption of certain other

Index Fund Shares based on a foreign

stock index currently listed on the

Amex (i.e., WEBS), which do not utilize

processes of the National Securities

Clearing Corporation ‘‘NSCC’’) in

connection with the transmittal of trade

instructions, the transfer of component

securities and the cash component, and

the transfer of iShares on creation and

redemption. In contrast, creation and

redemption procedures applicable to

Portfolio Depositary Receipts, such as

SPDRs and Index Fund Shares, such as

Select Sector SPDRs based on domestic

stock indexes, utilize such NSCC

processes.

Purchase or Creation of Creation Unit

Aggregations

The trust will issue and sell iShares

of each Fund only in Creation Unit

Aggregations 6 on a continuous basis

through the distributor, SEI Investments

Distribution Company (‘‘the

Distributor’’), without a sales load. The

price will be the net asset value

(‘‘NAV’’) next determined after receipt,

on any business day, of an order in

proper form. The consideration for

purchase of Creation Unit Aggregations

of a Fund generally consists of the inkind deposit of a designated portfolio of

equity securities (the ‘‘Deposit

Securities’’) per each Creation Unit

Aggregation of the stocks and

weightings in the relevant Fund’s

portfolio (‘‘Fund Securities’’) and an

amount of cash (the ‘‘Cash Component’’)

computed as described below. Together,

the Deposit Securities and the Cash

Component constitute the ‘‘Fund

Deposit,’’ which represents the

minimum initial and subsequent

investment amount for a Creation Unit

Aggregation of any Fund. The Trust will

impose a Transaction Fee in connection

with the creation and redemption of

Creation Unit Aggregations.

The Cash Component is an amount

equal to the Balancing Amount. The

‘‘Balancing Amount’’ is an amount

equal to the difference between the NAV

of the iShares (per Creation Unit

Aggregation) and the ‘‘Deposit

Amount.’’ The ‘‘Deposit Amount’’ is an

amount equal to the market value of the

Deposit Securities. If the Balancing

Amount is a positive number (i.e., the

NAV per Creation Unit Aggregation

exceeds the Deposit Amount), the Cash

Component will be paid to the Trust by

the Creator. If the Balancing Amount is

a negative number (i.e, the NAV per

Creation Unit Aggregation is less than

the Deposit Amount), the creator will

receive cash in an amount equal to the

differential.

The Adviser, through NSCC, will

make available on each Business Day

immediately prior to the opening of

business on the Amex, currently 9:30

a.m., New York time, the list of the

names and the required number of

shares of each Deposit Security to be

included in the current Fund Deposit

for each Fund. Such Fund Deposit is

applicable, subject to any adjustments,

to effect creations of Creation Unit

Aggregations of a given Fund, until such

time as the next-announced

composition of the Deposit Securities is

made available.

It is anticipated that the deposit of

Deposit Securities and the Cash

Component in exchange for iShares will

be made primarily by institutional

investors, arbitrageurs, and the

Exchange specialist. Creation Unit

Aggregations are separable upon

issuance into identical shares that are

listed and traded on the Amex.

Redemption of Creation Unit

Aggregations

Shares may be redeemed only in

Creation Unit Aggregations at their NAV

next determined after receipt of a

redemption request in proper form by

the fund through the Distributor and

only on a business day. Immediately

prior to the opening of business on the

Amex on each business day, the

Adviser, through NSCC, will identify

the Fund Securities that will be

applicable (subject to possible

amendment or correction) to

redemption requests for each Fund

received in proper form on that day.

33588 Federal Register / Vol. 65, No. 101 / Wednesday, May 24, 2000 / Notices

Fund Securities received on redemption

may not be identical to Deposit

Securities that are applicable to

creations of Creation Unit Aggregations.

Unless cash redemptions are available

or specified for a Fund, the redemption

proceeds for a Creation Unit

Aggregation generally consist of Fund

Securities—as announced by the

Adviser on the Business day of the

request for redemption received in

proper form—plus cash in an amount

equal to the difference between the NAV

of the iShares being redeemed, as next

determined after a receipt of a request

in proper form, and the value of the

Fund Securities (the ‘‘Cash Redemption

Amount’’).

If it is not possible to effect deliveries

of the Fund Securities, the Trust may in

its discretion exercise its option to

redeem iShares in cash, and the

redeeming beneficial owner will be

required to receive redemption proceeds

in cash. In addition, an investor may

request a redemption in cash which the

Fund may, in its sole discretion, permit.

In either case, the investor will receive

a cash payment equal to the NAV of its

iShares based on the NAV of iShares of

the relevant Fund next determined after

the redemption request is received in

proper form. A Fund may also, in its

sole discretion, upon request of a

shareholder, provide the redeemer a

portfolio of securities that differs from

the exact composition of the Fund

Securities but does not differ in NAV.

Availability of Information Regarding

Fund Shares and Underlying Indices

In addition to the list of names and

amount of each security constituting the

current Deposit Securities of the

Portfolio Deposit, the Cash Component

effective as of the previous business

day, per outstanding share of each

Fund, is expected to be made available

each business day. The Exchange

expects to disseminate, every 15

seconds during regular Amex trading

hours, through the facilities of the

Consolidated Tape Association

(‘‘CTA’’), an amount per Fund Share

representing the sum of the estimated

Cash Component effective through and

including the previous business day,

plus the current value of the Deposit

Securities in U.S. dollars, on a per share

basis.

The value of each Underlying Index

will be updated intra-day on a real-time

basis as individual Component

Securities change in price. These intraday values of the Underlying Indices

will be disseminated every 15 seconds

throughout the trading day. In addition,

these organizations will disseminate a

value for each Underlying Index once

each trading day, based on closing

prices in the relevant exchange market.

Each Fund will make available on a

daily basis the names and required

number of shares of each of the Deposit

Securities in a Creation Unit

Aggregation, as well as information

regarding the cash-balancing amount.

The NAV for each Fund will be

calculated and disseminated daily. In

addition, the Adviser maintains a

website that provides information about

the returns and methodology of various

indices, and will include the relevant

Underlying Index for each Fund. The

Trust also intends to maintain a website

that will include the relevant

prospectuses and additional

quantitative information that is updated

on a daily basis, including daily trading

volume and closing price for each Fund.

The Amex also intends to disseminate a

variety of data with respect to each

Index Series on a daily basis by means

of CTA and Consolidated Quotation

High Speed Lines, including shares

outstanding and cash amount per

Creation Unit Aggregation, which will

be made available prior to the opening

of the Amex. The closing prices of the

Funds’ Deposit Securities are readily

available from, as applicable, the

relevant exchanges, automated

quotation systems, or on-line

information services such as Bloomberg

or Reuters.

Dissemination of Indicative Portfolio

Value

In order to provide updated

information relating to each Fund for

use by investors, professionals and

persons wishing to create or redeem

iShares based on indexes with non-U.s.

components, it is expected that the

Exchange will disseminate thought the

facilities of the CTA an updated

indicative portfolio value (‘‘Value’’) for

each of the Funds traded on the

Exchange as calculated by a securities

information provider (‘‘Value

Calculator’’). It is anticipated that the

methodology utilized in connection

with the Funds will be similar to

procedures used to calculate the Value

for WEBS currently trading on the

Exchange. The Value will be

disseminated on a per iShares basis

every 15 seconds during regular Amex

trading hours of 9:30 a.m. to 4:15 p.m.

New York time. The equity securities

values included in the Value are the

values of the Deposit Securities, which

are the same as the portfolio that is to

be utilized generally in connection with

creations and redemptions of iShares in

Creation Unit Aggregations on that day.

The equity securities included in the

Value reflects the same market

capitalization weighting as the Deposit

Securities in the portfolio for the

particular iShares Fund. In addition to

the value of the Deposit Securities for

each Fund, the Value includes the Cash

Component. The Value also reflects

changes in currency exchange rates

between the U.S. dollar and the

applicable home foreign currency.

The Value may not reflect the value

of all securities included in the

applicable Underlying Index. In

addition, the Value does not necessarily

reflect the precise composition of the

current portfolio of securities held by

each Fund at a particular point in time.

Therefore, the Value on a per iShares

basis disseminated during Amex trading

hours should not be viewed as a realtime update of the NAV of a particular

Fund, which is calculated only once a

day. While the Value that will be

disseminated by the Amex by 9:30 a.m.

is expected to be generally very close to

the most recently calculated Fund NAV

on a per iShares basis, it is possible that

the value of the portfolio of securities

held by a Fund may diverge from the

Deposit Securities Values during any

trading day. In such case, the Value will

not precisely reflect the value of the

Fund portfolio.

However, during the trading day, the

Value can be expected to closely

approximate the value per Fund share of

the portfolio of securities for each Fund

except under unusual circumstances

(e.g., in the case of extensive

rebalancing of multiple securities in a

Fund at the same time of the Advisor).

The circumstances that might cause the

Value to be based on calculations

different from the valuation per Fund

share of the actual portfolio of a Fund

would not be different that

circumstances causing any index fund

or trust to diverge from an underlying

benchmark index.

The Exchange believes that

dissemination of the Value based on the

Deposit Securities provides additional

information regarding each Fund that

would not otherwise be available to the

public and is useful to professionals and

investors in connection with iShares

trading on the Exchange or the creation

or redemption of iShares.

For each Fund, the Value Calculator

will utilize closing prices (in applicable

foreign currency prices) in the principal

foreign market(s) for securities in the

Fund portfolio, and convert the price to

U.S. dollars. This Value will be updated

every 15 seconds during Amex trading

hours to reflect changes in currency

exchange rates between the U.S. dollar

and the applicable foreign currency. The

Value will also include the applicable

Cash Component for each Fund.

Federal Register / Vol. 65, No. 101 / Wednesday, May 24, 2000 / Notices 33589

7 In its 1940 Act exemptive application, the Trust

requests relief from the prospectus delivery

requirements imposed by Section 24(d) of the 1940

Act. The Exchange will inform member firms of the

prospectus delivery requirements applicable at

commencement of trading.

8See Securities Exchange Act Release No. 29063,

note 9, (SR–Amex–90–31) regarding Exchange

designation of equity derivative securities as

eligible for such treatment under Amex rule 154,

Commentary .04(c).

9 15 U.S.C. 78f(b)(5).

10 15 U.S.C. 78f(b)(5). In approving this rule, the

Commission notes that it has considered the

proposed rule’s impact on efficiency, competition,

and capital formation. 15 U.S.C. 78c(f).

11See Securities Exchange Act Release No. 3647

(March 8, 1996), 61 FR 10606 (March 14, 1996).

12 ‘‘World Equity Benchmark Shares’’ and

‘‘WEBS’’ are service marks of Morgan Stanley

Group, Inc. See Securities Exchange Act Release

No. 41983 (October 6, 1999), 64 FR 56008 (October

15, 1999).

13 ‘‘S&P’’, ‘‘S&P 500’’, and ‘‘SPDRs’’ are

trademarks of The McGraw-Hill Companies, Inc.,

and ‘‘Select Sector SPDR’’ is service mark of The

McGraw-Hill Companies, Inc., See Securities

Exchange Act Release 40479 (December 4, 1998), 63

FR 68483 (December 11, 1998).

For Funds that include foreign stocks,

the principal foreign markets for which

have trading hours overlapping regular

Amex trading hours, the Value

Calculator will update the applicable

Value every 15 seconds to reflect price

changes in the applicable foreign market

or markets, and convert such prices into

U.S. dollars based on the current

currency exchange rate. When the

foreign market or markets are closed but

the Amex is open, the Value will be

updated every 15 seconds to reflect

changes in currency exchange rates after

the foreign markets close.

Other Characteristics of iShares

It is anticipated that a minimum of

two Creation Unit Aggregations for each

Fund will be outstanding at the

commencement of trading on the

Exchange. The number of shares per

Creation Unit Aggregation is anticipated

to be approximately 50,000 shares.

Fund shares will be registered in

book-entry form through the Depository

Trust Company (‘‘DTC’’). Trading in

Fund shares on the Exchange will be

effected until 4:15 p.m. each business

day. The minimum trading increment

under Amex rule 127 for Fund Shares

will be 1⁄64 of $1.00.

Dividends from net investment

income will be declared and paid at

least annually by each Fund.

Distributions of realized securities

gains, if any, generally will be declared

and paid at least once a year, but each

Fund may make distributions on a more

frequent basis to comply with Internal

Revenue Code distribution

requirements. Certain of the Funds

intend to make the DTC book-entry

Dividend Reinvestment Service

available for use by beneficial owners of

the Fund through DTC Participants for

reinvestment of their cash proceeds.

The Exchange, in an information

circular, will inform member firms,

prior to commencement of trading, that

investors purchasing iShares will be

required to receive a Fund prospectus

prior to or concurrently with the

confirmation of a transaction therein.7

Original and Annual Listing Fees

The Amex original listing fee

applicable to the listing of iShares is

$5,000 for each Fund. In addition, the

annual listing fee under Section 141 of

the Amex Company Guide will be based

upon the year-end aggregate number of

outstanding iShares for all Funds

combined.

Stop and Stop Limit Orders

Amex Rule 154, Commentary .04(c)

provides that stop and stop limit orders

to buy or sell a security other than an

option, which is covered by Amex rule

950(f) and Commentary thereto, the

price of which is derivatively priced

based upon another security or index of

securities, may with the prior approval

of a Floor Official be elected by a

quotation, as set forth in Commentary

.04(c)(i–v). The Exchange has

designated iShares as eligible for this

treatment.8

Trading Halts

In addition to other factors that may

be relevant, the Exchange may consider

factors such as those set forth in Amex

rule 918C(b) in exercising its discretion

to halt or suspend trading in a Fund.

These factors include: (1) The extent to

which trading is not occurring in stocks

underlying the specific underlying

index; or (2) whether other unusual

conditions or circumstances detrimental

to the maintenance of a fair orderly

market are present. Trading in iShares

will halt in the event that market-wide

circuit breakers are triggered pursuant to

Amex to Rule 117.

III. Discussion

The Commission finds that the

proposed rule change is consistent with

the requirements of the Act and the

rules and regulations thereunder

applicable to a national securities

exchange, and in particular, with the

requirements of Section 6(b)(5).9

Specifically, the Commission finds that

the proposal to list and trade the iShares

S&P Europe 350 Index Fund and iShares

S&P/TSE 60 Fund will provide investors

with a convenient and less expensive

way of participating in the securities

markets, including involvement with

equities issued by foreign issuers. The

Exchange’s proposal should advance the

public interest by providing investors

with increased flexibility in satisfying

their investment needs by allowing

them to purchase and sell a single

security replicating or to a large extent

representing the performance of several

portfolios of stock a negotiated prices

throughout the business day.

Accordingly, the Commission finds that

the Exchange’s proposal will promote

just and equitable principles of trade,

foster cooperation and coordination

with persons engaged in resulting,

clearing, settling, processing

information with respect to, and

facilitating transactions in securities,

and, in general, protect investors and

the public interest consistent with

Section 6(b)(5) of the Act.10

Amex Rules 1000 A et seq. provide for

the listing and trading of Index Fund

Shares, which are shares issued by an

open-end management investment

company that seeks to provide

investment results that correspond

generally to the price and yield

performance of a specified foreign or

domestic index.11 The Exchange

currently lists under Amex Rules 1000A

et seq. eighteen series of World Equity

Benchmark Shares (‘‘WEB TM’’) based

on Morgan Stanley Capital Internation

foreign stock indices; 12 and nine series

of Select Sector SPDRs based on

Selected Sector Indexes comprised of

stocks representing various industry

sectors and included in the S&P 500 

Index.13 Similar to these other types of

Index Fund Shares, the Commission

believes that the iShares S&P Europe

350 Index Fund and iShares S&P/TSE

60 Fund will provide investors with an

alternative to trading a broad range of

securities on an individual basis, and

will give investors the ability to trade a

product representing an interest in a

portfolio of securities designed to reflect

substantially the applicable Underlying

Index. The iShares S&P Europe 350

Index Fund and iShares S&P/TSE 60

Fund will allow investors to: (1)

Respond quickly to market changes

through intra-day trading opportunities;

(2) engage in hedging strategies similar

to those used by institutional investors;

and, (3) reduce transactions costs for

trading a portfolio of securities.

Although these iShares are not

leveraged instruments, and, therefore do

not possess any of the attributes of stock

index options, their prices will be

derived and based on the value of the

securities and the cash held in the

Fund. Accordingly, the level of risk

involved in the purchase or sale of these

33590 Federal Register / Vol. 65, No. 101 / Wednesday, May 24, 2000 / Notices

14See Securities Exchange Act Release No. 42787

(May 15, 2000) (approving delivery of product

description in lieu of prospectus).

Funds is similar to the risk involved in

the purchase or sale of traditional

common stock, with the exception that

the pricing mechanism for these Funds

is based on a portfolio of securities.

Nevertheless, the Commission believes

that the unique nature of the iShares

S&P Europe 350 Index Fund and iShares

S&P/TSE 60 Fund raises certain product

design, disclosure, trading and other

issues that must be addressed.

Generally

The Commission believes that the

proposed iShares S&P Europe 350 Index

Fund and iShares S&P/TSE 60 Fund are

reasonably designed to provide

investors with an investment vehicle

that substantially reflects in value the

index it is based upon. In this regard,

the Commission notes that the Funds

will be developed and maintained using

two different investment approaches.

The iShares S&P/TSE 60 Fund will use

a replication strategy by which the Fund

will seek to match the Underlying

Index’s performance, before fees and

expenses, by buying and selling all of

the Underlying Index’s securities in the

same proportion as they are reflected in

the Underlying Index. The Fund may

not invest in every security in the

underlying index if the Adviser believes

it is not practical to do so.

The iShares S&P Europe 350 Index

Fund will be managed using the

representative portfolio sampling

approach. Under this strategy, the

Advisor will seek to construct the

portfolio of a Fund so that it will consist

of securities that have capitalization,

industry, and fundamental investment

characteristics that perform like those in

the corresponding Underlying Index.

The Fund may not hold all or most of

the securities in the Underlying Index

and may hold some securities that are

not part of the Underlying Index.

However, the Fund will not concentrate

more than 25% of its assets in the stocks

of a single industry or a group of

industries, except to the extent that its

Underlying Index does so. The

Exchange represents that the tracking

error on the Fund relative to the

performance of its Underlying Index

will be less than 5 percent.

The aim of these component selection

processes is to make index components

highly representative of the overall

economic sector composition and

market capitalization of a given market.

The Commission believes that the

aforementioned criteria should serve to

ensure that the underlying securities of

these indexes are well capitalized and

actively traded.

Listing and Trading

The Commission finds that the

Amex’s proposal contains adequate

rules and procedures to govern the

listing and trading of the iShares S&P

Europe 350 Index Fund and iShares

S&P/TSE 60 Fund. These Funds will be

subject to the full panoply of Amex

listing and delisting/suspension rules

and procedures governing the trading of

Index Fund Shares on the Amex. As

such, these Funds are subject to the

Amex rules governing the trading of

equity securities, including, among

others, rules governing trading halts,

notices of members, responsibilities of

the specialist, account opening and

customer suitability requirements, and

the election of a stop or limit order.

Amex surveillance procedures for Index

Fund Shares will also be applicable to

the iShares S&P Europe 350 Index and

iShares S&P/TSE 60 Fund. The

Commission believes that the

surveillance procedures developed by

the Amex for Index Fund Shares are

adequate to address the concerns

associated with the listing and trading

of these Funds, including any concerns

associated with purchasing and

redeeming Creation Units.

In addition, the Exchange has

designated that a minimum of two

creation units, approximately 100,000

shares, will be required to be

outstanding at start-up of trading. The

Commission believes this minimum

number is sufficient to help to ensure

that a minimum level of liquidity will

exist at the start of trading. Furthermore,

the Commission finds that registering

the Fund shares in book-entry form

through DTC, managing the distribution

of dividend from net investment

income, if any, and permitting

beneficial owners of the Funds to offer

the DTC book-entry Dividend

Reinvestment Service are characteristics

of the Funds that are consistent with the

Act and should allow for the

maintenance of fair and orderly markets

and perfect the mechanism of a free and

open market.

Furthermore, the Commission

believes that the Exchange’s proposal to

trade the iShares S&P Europe 350 Index

Fund and iShares S&P/TSE 60 Fund in

minimum fractional increments of 1⁄64 of

$1.00 is consistent with the Act. The

Commission believes that such trading

should enhance market liquidity, and

should promote more accurate pricing,

tighter quotations, and reduced price

fluctuations. The Commission also

believes that such trading should allow

customers to receive the best possible

execution of their transactions in the

Funds. Additionally, the Commission

believes that the proposed original

listing fee of $5,000 is reasonable as is

the proposed method for calculating the

annual fee.

Dissemination of Information Regarding

the Funds

The Commission believes that the

Values and figures that the Exchange

proposes to have disseminated for the

iShares S&P Europe 350 Fund and

iShares S&P/TSE 60 Fund will provide

investors with timely and useful

information concerning the value of the

individual Funds. The Exchange

represents that the Value information

will be disseminated, every 15 seconds

during regular Amex trading hours,

through the facilities of the CTA and

will reflect currently-available

information concerning the value of the

assets comprising the Deposit Securities

and the Cash Component. The intra-day

value of the Underlying Index also will

be disseminated every 15 seconds

throughout the trading day. On a daily

basis, the Fund will make available the

names and required number of shares of

each of the Deposit Securities in a

Creation Unit Aggregation, and the NAV

will be calculated and disseminated.

The Exchange represents that the Fund

will maintain a website containing the

prospectuses and relevant material that

is updated daily, including trading

volume and closing prices for each

Fund. Additionally, the Exchange

represents that it will disseminate on a

daily basis the shares outstanding and

cash amount per Creation Unit

Aggregation.

Disclosure

The Commission believes that the

Exchange’s proposal will ensure that

investors have information that will

allow them to be adequately apprised of

the terms, characteristics, and risks of

trading the iShares S&P Europe 350

Fund and iShares S&P/TSE 60 Fund.

Investors purchasing iShares will be

required to receive a fund prospectus

prior to or concurrently with the

confirmation of a transaction therein.

Alternatively, as previously noted, the

Funds will be subject to the Exchange’s

rules and procedures for Index Fund

Shares. This includes the provisions in

Commentary .03 to Amex Rule 1000A,

which provides for delivery of a product

description for series that have granted

relief from the prospectus delivery

requirements of the 1940 Act.14 The

prospectus or product description will

address the special terms and

Federal Register / Vol. 65, No. 101 / Wednesday, May 24, 2000 / Notices 33591

15As per telephone conversation between Mike

Cavalier, Associate General Counsel, Amex, and

Heather Traeger, Attorney, Division of Market

Regulation, SEC, on May 15, 2000.

16 15 U.S.C. 78s(b)(2).

17 17 CFR 200.30–3(a)(12).

1 15 U.S.C. 78l(d).

2 17 CFR 240.12d2–2(d).

3 15 U.S.C. 78l(b). 4 17 CFR 200.30–3(a)(1).

characteristics of the Funds, including a

statement regarding their redeemability

and method of creation, and a statement

regarding the likelihood of whether

such products will trade below, at, or

above net asset value, based on the rule

of discount or premiums.15 The delivery

requirement will extend to a member or

member organization carrying an

omnibus account for a non-member

broker-dealer, who must notify the nonmember to make the product

description available to its customers on

the same terms as are directly applicable

to members and member organizations.

Finally, Commentary .03 provides that a

member or member organization must

deliver a prospectus to a customer upon

request.

The Commission also notes that prior

to commencement of trading in the

Funds, the Exchange will issue a

circular to its members explaining the

unique characteristics and risks of this

particular type of security. The circular

also will note the Exchange members’

prospectus or product description

delivery requirements, and highlight the

characteristics of purchases in the

iShares S&P Europe 350 Funds and

iShares S&P/TSE 60 Fund. The circular

also will inform members of their

responsibilities under Amex Rule 411 in

connection with customer transactions

in these securities.

Accordingly, the Commission believes

that the rules governing the trading of

the iShares S&P Europe 350 Fund and

iShares S&P/TSE 60 Fund provide

adequate safeguards to prevent

manipulative acts and practices and to

protect investors and the public interest.

Scope of the Order

The Commission is approving the

iShares S&P Europe 350 Fund and

iShares S&P/TSE 60 Fund. Approval of

iShares on the S&P Euro Index, Dow

Jones Global Media Sector Index, Dow

Jones Global Pharmaceuticals Sector

Index, and Dow Jones Global

Telecommunications Sector Index

remains pending. Additionally,

approval of other similarly structured

products, or additional iShare Funds

based on foreign stock indexes will

require review by the Commission

pursuant to Section 19(b) of the Act

prior to being traded on the Exchange.

IV. Conclusion

It Is Therefore Ordered, pursuant to

Section 19(b)(2) of the Act,16 that the

proposed rule change (SR–Amex–99–

49) is partially approved with respect to

the iShares S&P Europe Index Fund and

iShares S&P/TSE 60 Fund.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.17

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–13003 Filed 5–23–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[File No. 1–04951]

Issuer Delisting; Notice of Application

To Withdraw From Listing and

Registration (Westcoast Energy Inc.,

Common Stock, No Par Value, and

Associated Common Stock Purchase

Rights)

May 18, 2000.

Westcoast Energy Inc. (‘‘Company’’)

has filed an application with the

Securities and Exchange Commission

(‘‘Commission’’), pursuant to section

12(d) of the Securities Exchange Act of

1934 (‘‘Act’’) 1 and Rule 12d2–2(d)

thereunder,2 to withdraw its Common

Stock, no par value, and associated

Common Stock Purchase Rights

(referred to collectively herein as the

‘‘Securities’’), from listing and

registration on the Pacific Exchange,

Inc. (‘‘PCX’’).

The Company, which is based in

Vancouver, British Columbia, and

whose Securities are additionally listed

on the Toronto Stock Exchange (‘‘TSE’’),

in Canada, and on the New York Stock

Exchange (‘‘NYSE’’), is seeking to

withdraw the Securities from listing and

registration on the PCX at this time in

order to save the costs associated with

such listing and related compliance.

The Company has stated that its

application relates solely to the

withdrawal of the Securities from listing

and registration on the PCX and shall

have no effect upon the Securities’

continued listing and registration on the

NYSE under section 12(b) of the Act.3

The withdrawal of the Securities from

listing and registration on the PCX was

approved by the Company’s board of

directors at a meeting held on February

15 and 16, 2000. Furthermore, the

Company has included with its

application a copy of a letter from the

PCX indicating that the Equity Listings

Committee of the PCX, at a meeting held

on May 2, 2000, has approved the

Company’s request that the Securities be

removed from listing and registration on

the Exchange, pending final approval of

the Commission.

Any interested person may, on or

before June 9, 2000, submit by letter to

the Secretary of the Securities and

Exchange Commission, 450 Fifth Street

NW., Washington, DC 20549–0609, facts

bearing upon whether the application

has been made in accordance with the

rules of the PCX and what terms, if any,

should be imposed by the Commission

for the protection of investors. The

Commission, based on the information

submitted to it, will issue an order

granting the application after the date

mentioned above, unless the

Commission determines to order a

hearing on the matter.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.4

Jonathan G. Katz,

Secretary.

[FR Doc. 00–13067 Filed 5–23–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. IC–24459; 812–11976]

Yahoo! Inc.; Notice of Application

May 18, 2000.

AGENCY: Securities and Exchange

Commission (‘‘Commission’’).

ACTION: Notice of application for an

order under section 3(b)(2) of the

Investment Company Act of 1940 (the

‘‘Act’’).

SUMMARY: Applicant Yahoo! Inc.

(‘‘Yahoo!’’) seeks an order under section

3(b)(2) of the Act declaring it to be

primarily engaged in a business other

than that of investing, reinvesting,

owning, holding or trading in securities.

Applicant is a global Internet new

media company that offers a branded

network of media, commerce and

communication services. On April 5,

2000, a temporary order was issued

pursuant to section 3(b)(2) of the Act

exempting applicant from all provisions

of the Act until July 10, 2000.

Filing Dates: The application was

filed on February 11, 2000 and amended

April 5, 2000 and May 16, 2000.

Hearing for Notification of Hearing:

An order granting the application will

be issued unless the Commission orders

a hearing. Interested persons may

request a hearing by writing to the

Commission’s Secretary and serving