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

33592 Federal Register / Vol. 65, No. 101 / Wednesday, May 24, 2000 / Notices

1Section 2(a)(9) of the Act defines ‘‘control’’ as

the power to exercise a controlling influence over

the management or policies of a company. That

section creates a presumption that an owner of

more than 25% of the outstanding voting securities

of a company controls the company.

2Rule 3a–1 provides an exemption from the

definition of investment company if no more than

45% of a company’s total assets consist of, and not

more than 45% of its net income over the last four

quarters is derived from, securities other than

government securities and securities of majorityowned subsidiaries and companies primarily

controlled by it.

applicant with a copy of the request,

personally or by mail. Hearing requests

should be received by the Commission

by 5:30 p.m. on June 12, 2000 and

should be accompanied by proof of

service on the applicant, in the form of

an affidavit, or, for lawyers, a certificate

of service. Hearing requests should state

the nature of the writer’s interest, the

reason for the request, and the issues

contested. Persons may request

notification of a hearing by writing to

the Commission’s Secretary.

ADDRESSES: Secretary, Securities and

Exchange Commission, 450 Fifth Street

NW, Washington, DC 20549–0609;

Applicant, 3420 Central Expressway,

Santa Clara, CA 95051.

FOR FURTHER INFORMATION CONTACT:

Janet M. Grossnickle, Attorney-Adviser,

at (202) 942–0526; or Mary Kay Frech,

Branch Chief, at (202) 942–0564 (Office

of Investment Company Regulation,

Division of Investment Management).

SUPPLEMENTARY INFORMATION: The

following is a summary of the

application. The complete application is

available for a fee from the

Commission’s Public Reference Branch,

450 Fifth Street NW, Washington, DC

20549–0102 (tel. 202–942–8090).

Applicant’s Representations

1. Yahoo!, a Delaware corporation ,

was formed in 1995. Yahoo! states that

it is a global Internet new media

company that offers a branded network

of media, commerce and

communication services. Yahoo!

develops, operates and markets

advertising-supported online properties,

including Yahoo!, a branded Internet

navigational service that is among the

most widely used and recognized search

guides on the World Wide Web. Yahoo!

states that it conducts its Internet and

new media business directly and

through wholly-owned and majorityowned subsidiaries and Yahoo! Japan, a

company that it controls within the

meaning of section 2(a)(9) of the Act.1

Yahoo! states that it is not in the

business of investing, reinvesting or

trading in securities.

2. Yahoo! has expanded its Internet

and new media business to Japan

through Yahoo! Japan, which unlike

Yahoo!’s other international

subsidiaries, is not majority-owned or

wholly-owned by Yahoo!. Yahoo! states

that Yahoo! Japan was created in 1996

as a joint venture between Yahoo! and

Softbank Corp. to establish and manage

a Japanese version of the Yahoo!

directory service, develop related

Japanese online navigational services

and conduct other related businesses.

Yahoo! states that it currently owns

34% of the outstanding voting securities

of Yahoo! Japan and Softbank Corp.

owns 51%. Yahoo! states that Yahoo!

Japan currently is a publicly traded

company with shares listed on the

Tokyo Stock Exchange. Yahoo!

represents that Yahoo! Japan is not an

investment company and is not relying

on section 3(c)(1) or 3(c)(7) of the Act.

As of December 31, 1999, Yahoo! states

that the fair market value of Yahoo!’s

interest in Yahoo! Japan was

approximately $8.4 billion, accounting

for over 90% of the value of Yahoo!’s

total assets (exclusive of government

securities and cash items) on an

unconsolidated basis.

3. Yahoo! represents that it maintains

a large cash position to help fund

operations, research and development,

and to take advantage of acquisition

opportunities as they arise. Yahoo!’s

cash position is currently invested in

cash and government securities; Yahoo!

plans to invest part of its cash position

in higher-yielding corporate bonds and

other high-quality debt securities that

are consistent with the goal of capital

preservation. Yahoo! represents that it

has adopted a Corporate Investment

Policy to ensure that its cash

management investments consist of only

certain high-quality predominately

short-term debt instruments (together

with cash items and government

securities, ‘‘Cash Management

Investments’’). Yahoo! represents that it

needs sufficient cash for bona fide

business purposes, such as funding

operations, funding research and

development and improvements to its

network, and funding strategic

acquisitions. Yahoo! also states that it

does not engage in speculative shortterm trading with its Cash Management

Investments.

4. Yahoo! states that it makes certain

small strategic, non-controlling

investments in companies that can

complement or enhance Yahoo!’s

Internet and new media business

(‘‘Strategic Investments’’). Yahoo! states

that it carries these investments on its

balance sheet as ‘‘long-term’’ assets and

does not invest or trade in such

securities for short-term or speculative

purposes. As of December 31, 1999, the

value of the Strategic Investments was

less than 5% of the value of Yahoo!’s

total assets (exclusive of government

securities and cash items) on an

unconsolidated basis. Yahoo! states that

it does not hold Strategic Investments

because of the possibility of gain

resulting from an increase in the market

price of the securities, but primarily as

a means to enter into or solidify

business relationships with companies

to expand Yahoo!’s business lines.

Yahoo! further states that it uses

Strategic Investments as a way of

outsourcing research and development

instead of developing technology

internally.

Applicant’s Legal Analysis

1. Yahoo! seeks an order under

section 3(b)(2) of the Act declaring that

it is primarily engaged in a business

other than that of investing, reinvesting,

owning, holding or trading in securities,

and therefore not an investment

company as defined in the Act.

2. Under section 3(a)(1)(C) of the Act,

an issuer is an investment company if

it is engaged or proposes to engage in

the business of investing, reinvesting,

owning, holding or trading in securities,

and owns or proposes to acquire

investment securities having a value in

excess of 40% of the value of the

issuer’s total assets (exclusive of

government securities and cash items)

on an unconsolidated basis. Section

3(a)(2) of the Act defines ‘‘investment

securities’’ to include all securities

except government securities, securities

issued by employees’ securities

companies, and securities issued by

majority-owned subsidiaries of the

owner which: (i) Are not investment

companies; and (ii) are not relying on

the exclusive from the definition of

investment company in section 3(c)(1)

or 3(c)(7) of the Act.

3. Yahoo! states that its interest in

Yahoo! Japan represents over 90% of its

total assets (exclusive of government

securities and cash items) on an

unconsolidated basis. Yahoo! states that

it cannot rely upon rule 3a–1 under the

Act because, although it owns over 25%

of the outstanding voting securities of

Yahoo! Japan, it does not primarily

control Yahoo! Japan because another

entity owns a larger percentage of voting

securities.2 If the interest in Yahoo!

Japan is deemed to be an ‘‘investment

security’’ (as that term is defined in

section 3(a)(2) of the Act), Yahoo! may

be deemed to be an investment

company within the meaning of section

3(a)(1)(C) of the Act.

Federal Register / Vol. 65, No. 101 / Wednesday, May 24, 2000 / Notices 33593

3Tonopah Mining Company of Nevada, 26 SEC

426, 427 (1947).

4. Yahoo! states that it views its

controlling interest in Yahoo! Japan as

an operating asset. Yahoo! represents

that it plays a significant role in the

management of Yahoo! Japan and is

fully involved both directly and

indirectly, in the operations of Yahoo!

Japan. Yahoo! states that it directly

oversees the operations of Yahoo! Japan

through its involvement with the board

of directors of Yahoo! Japan. Yahoo!

further states that Yahoo! Japan operates

under various agreements with Yahoo!

that give Yahoo! significant power to

direct the operations of Yahoo! Japan,

including a licensing agreement that,

among other things, sets minimum

content specifications and subjects

Yahoo! Japan to an international pricing

policy designed by Yahoo! to allocate

sales revenue involving more than one

Yahoo! entity. Yahoo! argues that these

facts demonstrate not only that Yahoo!

controls Yahoo! Japan, but also that it is

involved in the management and

operations of Yahoo! Japan.

5. Section 3(b)(2) of the 1940 Act

provides that, notwithstanding section

3(a)(1)(C) of the Act, the Commission

may issue an order declaring an issuer

to be primarily engaged in a business or

businesses other than that of investing,

reinvesting, owning, holding, or trading

in securities either directly, through

majority-owned subsidiaries, or

controlled companies conducting

similar types of business. Yahoo!

requests an order under section 3(b)(2)

of the Act declaring that it is primarily

engaged in a business other than that of

investing, reinvesting, owning, holding

or trading in securities, and therefore

not an investment company as defined

in the Act.

6. In determining whether a company

is primarily engaged in a noninvestment company business under

section 3(b)(2), the Commission

considers: (a) The applicant’s historical

development; (b) its public

representations of policy; (c) the

activities of its officers and directors; (d)

the nature of its present assets; and (e)

the sources of its present income. 3

a. Historical Development. Yahoo!

states that since its inception in 1995, it

has considered itself to be a company

engaged in the Internet and new media

business of developing and providing

Internet-related products and services.

Yahoo! represents that its business

strategy has not changed since it

outlined its business plan in its

prospectus for the initial public offering

of its securities in 1996. Yahoo! has

used its revenue and raised capital to

expand its operations into foreign

countries, to expand its product and

service lines and to acquire companies

with complementary products or

services.

b. Public Representations of Policy.

Yahoo! states that it has never

represented that it is involved in any

business other than the Internet and

new media business that develops and

provides Internet-related products and

services. Yahoo! asserts that it has

consistently stated in its reports to

stockholders, press releases and

periodic reports filed with the

Commission that it is an Internet and

new media company. Yahoo! states that

it emphasizes operating results and has

never emphasized either its investment

income or the possibility of significant

appreciation from its Cash Management

Investments or Strategic Investments as

a material factor in its business or future

growth.

c. Activities of Officers and Directors.

Yahoo! states that its board of directors

and its officers spend almost all of their

time on Yahoo!’s Internet and new

media business. The board of directors’

activities with respect to Yahoo!’s Cash

Management Investments is minimal,

limited to its adoption of the Corporate

Investment Policy and periodically

receiving reports. Yahoo! also states that

only two of its approximately 2,000

employees spend any time with respect

to its Cash Management Investments,

and those employees spend only

approximately 20% of their time in this

manner. Yahoo! states that the amount

of time that the board of directors

dedicates to the Strategic Investments is

small relative to the amount of time

dedicated to Yahoo!’s business

activities.

d. Nature of Assets. Yahoo! states that

as of December 31, 1999, exclusive of

cash items and government securities,

over 90% of Yahoo!’s total assets, on an

unconsolidated basis, was attributable

to direct non-investment security assets

and Yahoo!’s interests in wholly- and

majority-owned subsidiaries and Yahoo!

Japan. As of December 31, 1999, Yahoo

represents that less than 5% of its total

assets (exclusive of cash items and

government securities), on an

unconsolidated basis, were attributable

to Strategic Investments. Yahoo further

represents that Cash Management

Investments comprised less than 10% of

its total assets, as of December 31, 1999.

e. Sources of Income. Yahoo! states

that for the year ended December 31,

1999, Yahoo!’s investment income

comprised approximately 37% and its

operating income comprised

approximately 63% of Yahoo!’s gross

income. Yahoo! further states that for

the quarter ended March 31, 2000,

Yahoo!’s investment income comprised

approximately 44%, and operating

income comprised approximately 57%

of Yahoo!’s gross income. Moreover,

Yahoo! states that 70% of the

approximately $57 million of

investment income it reported in the

quarter ended March 31, 2000, resulted

from the consolidation of certain joint

venture operations following Yahoo!’s

acquisitions of Geocities and

broadcast.com, not from speculation in

securities. Yahoo! notes that in the past

its income from operations has

fluctuated widely and Yahoo! has

incurred substantial non-recurring costs

in connection with acquisitions and

product development. Yahoo! notes that

the composition of its income, at-times,

is not representative of Yahoo!’s

activities as an operating company.

Yahoo! believes that the sources of its

revenue are more representative of

Yahoo!’s activities as an operating

company. Yahoo! states that as far back

as 1996, Yahoo! generated 83% of its

total revenue from sales of

advertisements and 14% from

investment income. For the year ended

December 31, 1999, Yahoo states that it

generated 94% of its total revenue from

operating activities and the remaining

6% from investment income. Yahoo!

expects that in the future the percentage

of its total revenues derived from

operating activities will ordinarily be

over 90%.

7. Yahoo! thus asserts that it satisfies

the standards for an order under section

3(b)(2) of the Act.

Applicant’s Conditions

Applicant agrees that the order

granting the requested relief will be

subject to the following conditions:

1. Yahoo! will continue to allocate

and utilize its accumulated cash and

Cash Management Investments for bona

fide business purposes.

2. Yahoo! will refrain from investing

or trading in securities for short-term

speculative purposes.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–13002 Filed 5–23–00; 8:45 am]

BILLING CODE 8010–01–M