[Federal Register Volume 65, Number 77 (Thursday, April 20, 2000)]
[Notices]
[Pages 21215-21219]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-9938]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 24393, 812-11598]


Barclays Global Fund Advisors, et al.; Notice of Application

April 17, 2000.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application for an order under section 6(c) of the 
Investment Company Act of 1940 (``Act'') for an exemption from sections 
2(a)(32), 5(a)(1), 22(d), and 22(e) of the Act and rule 22c-1 under the 
Act, and under sections 6(c) and 17(b) of the Act for an exemption from 
sections 17(a)(1) and (a)(2) of the Act.

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Summary of Application: Applicants request an order that would permit 
an open-end management investment company, whose portfolios will 
consist of the component securities of certain

[[Page 21216]]

foreign indices, to issue shares of limited redeemability; permit 
secondary market transactions in the shares of the portfolios at 
negotiated prices on the American Stock Exchange LLC (``AMEX''); permit 
affiliated persons of the portfolios to deposit securities into, and 
receive securities from, the portfolios in connection with the purchase 
and redemption of aggregations of the portfolios' shares; and permit 
certain portfolios to pay redemption proceeds more than seven days 
after the tender of shares of the portfolios for redemption under 
certain circumstances.

Applicants: Barclay Global Fund Advisors (``Adviser''), iShares Trust 
(``Fund'') and its current index series (``Initial Index Series'') and 
future index series (``Future Index Series'', and together with the 
Initial Index Series, the ``Index Series''), and SEI Investments 
Distribution Company (``Distributor'').

Filing Dates. The application was filed on April 30, 1999. Applicants 
have agreed to file an amendment during the notice period, the 
substance of which is reflected in this notice.

Hearing or Notification of Hearing. An order granting the requested 
relief will be issued unless the Commission orders a hearing. 
Interested persons may request a hearing by writing to the Commission's 
Secretary and serving applicants with a copy of the request, personally 
or by mail. Hearing requests should be received by the Commission by 
5:30 p.m. on May 5, 2000 and should be accompanied by proof of service 
on applicants, 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, Commission, 450 5th Street, NW, Washington, D.C. 
20549-0609. Adviser, 45 Fremont Street, San Francisco, CA 94105; Fund, 
c/o Investors Bank & Trust Company, 200 Clarendon Street, Boston, MA 
02116; and Distributor, 1 Freedom Valley Drive, Oaks, PA 19456.

FOR FURTHER INFORMATION CONTACT: Anu Dubey, Senior Counsel, at (202) 
942-0687, or Michael Mundt, Branch Chief, at (202) 942-0564 (Division 
of Investment Management, Office of Investment Company Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained for a fee at the 
Commission's Public Reference Branch, 450 5th Street, NW, Washington, 
D.C. 20549-0102 (tel. 202-942-8090).

Applicants' Representations

    1. The Fund is an open-end management investment company registered 
under the Act and established in the state of Delaware. The Adviser, an 
investment adviser registered under the Investment Advisers Act of 
1940, will serve as investment adviser to the Fund. The Distributor, a 
broker-dealer unaffiliated with the Adviser and registered under the 
Securities Exchange Act of 1934 (``Exchange Act''), will serve as the 
principal underwriter of the Fund's shares on an agency basis.
    2. Each Index Series will invest in a portfolio of securities 
(``Portfolio Securities'') generally consisting of the component 
securities of a specified foreign securities index (``Subject 
Index''),\1\ There are seven Initial Index Series.\2\ No entity that 
creates, compiles, sponsors or maintains a Subject Index will be an 
affiliated person, as defined in section 2(a)(3) of the Act, or an 
affiliated person of an affiliated person of the Fund, the Adviser, any 
subadviser to an Index Series or the Distributor.
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    \1\ At least 90% of each Index Series' assets will be invested 
in the component securities of its Subject Index. An Index Series 
may also invest up to 10% of its assets in certain futures, option 
and swap contracts, cash and cash equivalents, as well as certain 
securities not included in the Subject Index under limited 
circumstances.
    \2\ The Subject Indices for the Initial Index Series are the 
Standard & Poor's (``S&P'') Europe 350 Index, S&P Euro Index, S&P 
Global 100 Index, S&P/TSE 60 Index, Dow Jones Global Media Sector 
Index, Dow Jones Global Pharmaceuticals Sector Index, and Dow Jones 
Global Telecommunications Sector Index.
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    3. The investment objective of each Index Series will be to provide 
investment results that correspond generally to the price and yield 
performance of its relevant Subject Index. Intraday values of each 
Subject Index will be disseminated every 15 seconds throughout the 
trading day. An Index Series will utilize as an investment approach 
either a replication strategy or a representative sampling strategy. An 
Index Series using a replication strategy generally will hold most of 
the component securities of its Subject Index, but may not hold all of 
the underlying securities that comprise a Subject Index in certain 
instances. This may be the case when, for example, a potential 
component security is illiquid or when there are practical difficulties 
or substantial costs involved in holding every security in a Subject 
Index. An Index Series using a representative sampling strategy seeks 
to hold a representative sample of the component securities of the 
Subject Index and will invest in some but not all of the component 
securities of its Subject Index.\3\ Applicants anticipate that an Index 
Series that utilizes the representative sampling technique will not 
track its Subject Index with the same degree of accuracy as an 
investment vehicle that invested in every component security of the 
Subject Index with the same weighting as the Subject Index. Applicants 
expect that each Index Series will have a tracking error relative to 
the performance of its respective Subject Index of no more than 5 
percent.
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    \3\ The stock selected for inclusion in an Index Series by the 
Adviser will have aggregate investment characteristics (based on 
market capitalization and industry weightings), fund characteristics 
(such as return variability, earnings valuation and yield) and 
liquidity measures similar to those of the Subject Index taken in 
its entirety.
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    4. Shares of an Index Series (``Shares'') will be sold in 
aggregations of 50,000 Shares (``Creation Units'') as specified in the 
relevant prospectus. The price of a Creation Unit will range from 
$1,000,000 to $8,500,000. Creation Units may be purchased only by or 
through a Depository Trust Company (``DTC'') participant. The DTC 
participant must enter into a participant agreement with the 
Distributor (``Authorized Participant''). Creation Units generally will 
be issued in exchange for an in-kind deposit of securities and cash. 
The Index Series also may sell Creation Units on a ``cash only'' basis 
in limited circumstances. An investor wishing to make an in-kind 
purchase of a Creation Unit from an Index Series will have to transfer 
to the Fund a ``Portfolio Deposit'' consisting of (i) a portfolio of 
securities that has been selected by the Adviser to correspond 
generally to the price and yield performance of the relevant Subject 
Index (``Deposit Securities''), and (ii) a cash payment or credit to 
equalize any difference between (a) the total aggregate market value 
per Creation Unit of the Deposit Securities and (b) the net asset value 
(``NAV'') per Creation Unit of the Index Series (the ``Balancing 
Amount'').\4\ An investor

[[Page 21217]]

purchasing a Creation Unit from an Index Series will be charged a fee 
(``Transaction Fee'') to prevent the dilution of the interests of the 
remaining shareholders resulting from the Index Series incurring costs 
in connection with the purchase of Creation Units.\5\ Each Index Series 
will disclose the maximum Transaction Fees charged by the Index Series 
in its prospectus and the method of calculating the Transaction Fees in 
its statement of additional information (``SAI'').
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    \4\ On each business day, the Adviser will make available 
through the Distributor, immediately prior to the opening of trading 
on the AMEX, the list of the names and the required number of shares 
of each Deposit Security for each Index Series that offers in-kind 
purchases of Creation Units. The Portfolio Deposit will be 
applicable to purchases of Creation Units until a change in the 
Portfolio Deposit composition is next announced. In addition, each 
Index Series reserves the right to permit or require the 
substitution of an amount of cash to be added to the Balancing 
Amount to replace any Deposit Security that may be unavailable or 
unavailable in sufficient quantity for delivery to the Fund, or 
which may be ineligible for trading by an Authorized Participant or 
the investor on whose behalf the Authorized Participant is acting. 
In addition, the AMEX will disseminate every 15 seconds throughout 
the trading day, via the facilities of the Consolidated Tape 
Association, an amount representing on a per Share basis, the sum of 
the Balancing Amount effective through and including the prior 
business day, plus the current value of the Deposit Securities.
    \5\ In situations where an Index Series permits a purchaser to 
substitute cash for Deposit Securities, the purchaser may be 
assessed an additional fee to offset the Fund's brokerage and other 
transaction costs associated with using cash to purchase the 
requisite Deposit Securities.
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    5. Orders to purchase Creation Units will be placed with the 
Distributor who will be responsible for transmitting the orders to the 
Fund. The Distributor will issue confirmations of acceptance, issue 
delivery instructions to the Fund to implement the delivery of Creation 
Units, and maintain records of the orders and confirmations. The 
Distributor also will be responsible for delivering prospectuses to 
purchasers of Creation Units.
    6. Persons purchasing Creation Units from an Index Series may hold 
the Shares or sell some or all of them in the secondary market. Shares 
will be listed on the AMEX and traded in the secondary market in the 
same manner as other equity securities. One or more AMEX specialists 
will be assigned to make a market in Shares. The price of Shares traded 
on the AMEX will be based on a current bid/offer market, and each Share 
is expected to have a market value of between $20 an $170. Transactions 
involving the sale of Shares in the secondary market will be subject to 
customary brokerage commissions and charges.
    7. Applicants expect that purchasers of Creation Units will include 
institutional investors and arbitrageurs (which could include 
institutional investors). The AMEX Specialist, in providing for a fair 
and orderly secondary market for Shares, also may purchase Shares for 
use in its market-making activities on the AMEX. Applicants expect that 
secondary market purchasers of Shares will include both institutional 
and retail investors.\6\ Applicants believe that arbitrageurs and other 
institutional investors will purchase or redeem Creation Units to take 
advantage of discrepancies between the Shares' market price and the 
Shares' underlying NAV. Applicants expect that this arbitrage activity 
will provide a market ``discipline'' that will result in a close 
correspondence between the price at which the Shares trade and their 
NAV. In other words, applicants do not expect the Shares to trade at a 
significant premium or discount to their NAV.
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    \6\ Shares will be registered in book-entry form only. DTC or 
its nominee will be the registered owner of all outstanding Shares. 
Records reflecting the beneficial owners of Shares will be 
maintained by DTC or its participants.
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    8. Shares will not be individually redeemable. Shares will only be 
redeemable in Creation Unit-size aggregations through each Index 
Series. To redeem, an investor will have to accumulate enough Shares to 
constitute a Creation Unit. An investor redeeming a Creation Unit 
generally will receive (i) a portfolio of Portfolio Securities in 
effect on the date the request for redemption is made (``Redemption 
Securities''), which may not be identical to the Deposit Securities 
applicable to the purchase of Creation Units, and (ii) a ``Cash 
Redemption Payment,'' consisting of an amount calculated in the same 
manner as the Balancing Amount, although the actual amounts may differ 
if the Redemption Securities are not identical to the Deposit 
Securities. An investor may receive the cash equivalent of a Redemption 
Security in certain circumstances, such as where a redeeming entity is 
restrained by regulation or policy from transacting in the Redemption 
Security. An Index Series may redeem Creation Units in cash in limited 
circumstances, such as when it is not possible to effect deliveries of 
Redemption Securities in the applicable jurisdiction.\7\ A redeeming 
investor will pay a Transaction Fee to offset the Fund's transaction 
costs, whether the redemption proceeds are in-kind or cash. An 
additional variable charge, expressed as a percentage of the redemption 
proceeds, will be made for cash redemptions.
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    \7\ Applicants note that certain holders of Shares of a 
particular Subject Index may be subject to unfavorable tax treatment 
if they are entitled to receive in-kind redemption proceeds. The 
Fund may adopt a policy with respect to such Index Series that such 
holders of Shares may redeem Creation Unit Aggregations solely for 
cash.
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    9. Because each Index Series will redeem Creation Units in-kind, an 
Index Series will not have to maintain cash reserves for redemptions. 
This will allow the assets of each Index Series to be committed as 
fully as possible to tracking its Subject Index. Accordingly, 
applicants state that each Index Series will be able to track its 
Subject Index more closely than certain other investment products that 
must allocate a greater portion of their assets for cash redemptions.
    10. Applicants state that neither the Fund nor any Index Series 
will be marketed or otherwise held out as an ``open-end investment 
company'' or a ``mutual fund.'' Rather, the designation of the Fund and 
the Index Series in all marketing materials will be limited to the 
terms ``exchange-traded fund,'' ``investment company,'' ``fund,'' or 
``trust'' without reference to an ``open-end fund'' or ``mutual fund,'' 
except to contrast the Fund and the Index Series with a conventional 
open-end investment company. Any marketing materials that describe the 
purchase or sale of Creation Units, or refer to redeemability, will 
prominently disclose that Shares are not individually redeemable and 
that owners of Shares may tender Shares for redemption to the Fund in 
Creation Unit aggregations only. The same type of disclosure will be 
provided in each Index Series' prospectus, SAI, and all reports to 
shareholders.\8\ The Fund will provide copies of its annual and semi-
annual shareholder reports to DTC participants for distribution to 
beneficial holders of Shares.
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    \8\ Applicants state that persons purchasing Creation Units will 
be cautioned in the prospectus or SAI that some activities on their 
part may, depending on the circumstances, result in their being 
deemed statutory underwriters and subject them to the prospectus 
delivery and liability provisions of the Securities Act of 1933 
(``Securities Act''). For example, a broker-dealer firm or its 
client may be deemed a statutory underwriter if it takes Creation 
Units after placing an order with the Distributor, breaks them down 
into the constituent Shares, and sells Shares directly to its 
customers; or if it chooses to couple the creation of a supply of 
new Shares with an active selling effort involving solicitation of 
secondary market demand for Shares. The prospectus or SAI will state 
that whether a person is an underwriter depends upon all the facts 
and circumstances pertaining to that person's activities. The 
prospectus or SAI also will state that broker-dealer firms should 
also note that dealers who are not ``underwriters'' but are 
participating in a distribution (as contrasted to ordinary secondary 
trading transactions), and thus dealing with Shares that are part of 
an ``unsold allotment'' within the meaning of section 4(3)(C) of the 
Securities Act, would be unable to take advantage of the prospectus 
delivery exemption provided by section 4(3) of the Securities Act.
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Applicants' Legal Analysis

    1. Applicants request an order under section 6(c) of the Act 
granting an exemption from sections 2(a)(32), 5(a)(1), 22(d), and 22(e) 
of the Act and rule 22c-1 under the Act; and under sections 6(c) and 
17(b) of the Act granting an exemption from sections 17(a)(1) and 
(a)(2) of the Act. Applicants

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request relief for the Initial Index Series as well as Future Index 
Series. Any Future Index Series relying on any order granted pursuant 
to this application will comply with the terms and conditions in the 
application.
    2. Section 6(c) of the Act provides that the Commission may exempt 
any person, security, or transaction, or any class of persons, 
securities, or transactions, if and to the extent that such exemption 
is necessary or appropriate in the public interest and consistent with 
the protection of investors and the purposes fairly intended by the 
policy and provisions of the Act.

Sections 5(a)(1) and 2(a)(32) of the Act

    3. Section 5(a)(1) of the Act defines an ``open-end company'' as a 
management investment company that is offering for sale or has 
outstanding any redeemable security of which it is the issuer. Section 
2(a)(32) of the Act defines a redeemable security as any security, 
other than short-term paper, under the terms of which the holder, upon 
its presentation to the issuer, is entitled to receive approximately 
his proportionate share of the issuer's current net assets, or the cash 
equivalent. Because Shares will not be individually redeemable, 
applicants request an order under section 6(c) of the Act that would 
permit the Fund to register and operate as an open-end management 
investment company and issue Shares that are redeemable in Creation 
Units. Applicants state that investors may purchase Shares in Creation 
Units from each index Series and redeem Creation Units through each 
Index Series. Applicants further state that because the market price of 
Creation Units will be disciplined by arbitrage opportunities, 
investors generally should be able to sell Shares in the secondary 
market at approximately their NAV.

Section 22(d) of the Act and Rule 22c-1 Under the Act

    4. Section 22(d) of the Act, among other things, prohibits a dealer 
from selling a redeemable security that is being currently offered to 
the public by or through an underwriter, except at a current public 
offering price described in the prospectus. Rule 22c-1 under the Act 
generally requires that a dealer selling, redeeming, or repurchasing a 
redeemable security do so only at a price based on its NAV. Applicants 
state that secondary market trading in Shares will take place at 
negotiated prices, not at a current offering price described in the 
prospectus, and not at a price based on NAV. Thus, purchases and sales 
of Shares in the secondary market will not comply with section 22(d) 
and rule 22c-1. Applicants request an exemption under section 6(c) of 
the Act from these provisions.
    5. Applicants assert that the concerns sought to be addressed by 
section 22(d) of the Act and rule 22c-1 under the Act with respect to 
pricing are equally satisfied by the proposed method of pricing Shares. 
Applicants maintain that while there is little legislative history 
regarding section 22(d), its provisions, as well as those of rule 22c-
1, appear to have been designed to (i) prevent dilution caused by 
certain riskless-trading schemes by principal underwriters and contract 
dealers, (ii) prevent unjust discrimination or preferential treatment 
among buyers resulting from sales at different prices, and (iii) assure 
an orderly distribution of investment company shares by eliminating 
price competition from dealers offering shares at less than the 
published sales price and repurchasing shares at more than the 
published redemption price.
    6. Applicants believe that none of these purposes will be thwarted 
by permitting Shares to trade in the secondary market at negotiated 
prices. Applicants state (i) that secondary market trading in Shares 
would not cause dilution for owners of Shares because such transactions 
do not directly involve Index Series assets, and (ii) to the extent 
different prices exist during a given trading day, or from day to day, 
these variances will occur as a result of third-party market forces, 
such as supply and demand. Therefore, applicants assert that secondary 
market transactions in Shares will not lead to discrimination or 
preferential treatment among purchasers. Finally, applicants contend 
that the proposed distribution system will be orderly because arbitrage 
activity will ensure that the difference between the market price of 
Shares and their NAV remains narrow.

Section 22(e) of the Act

    7. Section 22(e) of the Act generally prohibits a registered 
investment company from suspending the right of redemption or 
postponing the date of payment of redemption proceeds for more than 
seven days after the tender of a security for redemption. Applicants 
state that local market delivery cycles for transferring Redemption 
Securities to redeeming investors, together with local market holiday 
schedules, will require a delivery process in excess of seven calendar 
days for some Index Series in certain circumstances during the calendar 
year. Applicants request relief under section 6(c) from section 22(e) 
so that certain of the Index Series may pay redemption proceeds up to 
twelve calendar days after the tender of Shares for redemption.\9\ 
Except as otherwise subsequently disclosed in the prospectus or SAI for 
the relevant Index Series, applicants expect, however, that these Index 
Series will be able to deliver redemption proceeds within seven days at 
all other times.\10\ With respect to Future Index Series, applicants 
seek the same relief from section 22(e) only to the extent that 
circumstances exist similar to those described herein.
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    \9\ Specifically, applicants request that the (i) S&P Euro Index 
Series, S&P Europe 350 Index Series and S&P Global 100 Index Series 
be permitted to make redemption payments up to ten calendar days 
after the tender of a Creation Unit for redemption, and (ii) Dow 
Jones Global Media Sector Index Series, Dow Jones Global 
Phamaceuticals Sector Index Series and Dow Jones Global 
Telecommunications Sector Index Series be permitted to make 
redemption payments up to twelve calendar days after the tender of a 
Creation Unit for redemption.
    \10\ Applicants acknowledge that no relief obtained from the 
requirements of section 22(e) will affect any obligations applicants 
may otherwise have under rule 15c-1 under the Exchange Act. Rule 
15c6-1 requires that most securities transactions be settled within 
three business days of the trade date. Release No. IC-23860, 1999 WL 
3621843 (S.E.C.).
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    8. The principal reasons for the requested exemption is that 
settlement of redemptions for the Index Series is contingent not only 
on the settlement cycle of the United States market but also on the 
currently practicable delivery cycles in the local markets for the 
underlying foreign securities of each Index Series. Applicants believe 
that the Fund will be able to comply with the delivery requirements of 
section 22(e) except where the holiday schedule applicable to the 
specific foreign market will not permit delivery of redemption proceeds 
within seven calendar days.
    9. Applicants state that section 22(e) of the Act was designed to 
prevent unreasonable, undisclosed, and unforeseen delays in the payment 
of redemption proceeds. Applicants assert that their requested relief 
will not lead to the problems section 22(e) was designed to prevent. 
Delays in the payment of Shares redemption proceeds will occur 
principally due to local holidays. Applicants state that the SAI will 
disclose those local holidays (over the period of at least one year 
following the date of the SAI), if any, that are expected to prevent 
the delivery of redemption proceeds in seven calendar days and the 
maximum number of days needed to deliver the proceeds for each Index 
Series. Applicants state that the local holidays relevant to each Index 
Series as in effect in a given year will be listed in the series' 
prospectus or SAI or both, and these disclosure documents will identify 
instances in such year when, due to such holidays, more than

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seven days will be needed to deliver redemption proceeds.

Section 17(a) of the Act

    10. Section 17(a) of the Act generally prohibits an affiliated 
person of a registered investment company, or an affiliated person of 
such person, from selling any security to or purchasing any security 
from the company. Because purchases and redemptions of Creation Units 
may be ``in kind'' rather than cash transactions, section 17() may 
prohibit affiliated persons of an Index Series from purchasing or 
redeeming Creation Units in-kind. Because the definition of 
``affiliated person'' of another person in section 2(a)(3)(A) of the 
Act includes any person owning five percent or more of an issuer's 
outstanding voting securities, every purchaser of a Creation Unit will 
be affiliated with the Index Series so long as fewer than twenty 
Creation Units are in existence. In addition, any person owning more 
than 25% of the Shares of an Index Series may be deemed an affiliated 
person under section 2(a)(3)(C) of the Act. Applicants request an 
exemption from section 17(a) under sections 6(c) and 17(b), to permit 
these affiliated persons of the Index Series to purchase and redeem 
Creation Units.
    11. Section 17(b) authorizes the Commission to exempt a proposed 
transaction from section 17(a) if evidence establishes that the terms 
of the transaction, including the consideration to be paid or received, 
are reasonable and fair and do not involve overreaching, and the 
proposed transaction is consistent with the policies of the registered 
investment company and the general provisions of the Act. Applicants 
contend that no useful purpose would be served by prohibiting persons 
with the types of affiliations described above from purchasing or 
redeeming Creation Units. The deposit procedure for in-kind purchases 
and redemptions will be the same for all purchases and redemptions, and 
Deposit Securities and Redemption Securities will be valued under the 
same objective standards applied to valuing Portfolio Securities. 
Therefore, applicants state that in-kind purchases and redemptions will 
afford no opportunity for an affiliated person of an Index Series to 
effect a transaction detrimental to the other holders of Shares. 
Applicants also believe that in-kind purchases and redemptions will not 
result in abusive self-dealing or overreaching by affiliated persons of 
the Index Series.

Applicants' Conditions

    Applicants agree that the order granting the requested relief will 
be subject to the following conditions:
    1. Applicants will not register a Future Index Series of the Fund 
by means of filing a post-effective amendment to the Fund's 
registration statement or by any other means, unless (i) applicants 
have requested and received with respect to such Future Index Series, 
either exemptive relief from the Commission or a no-action letter from 
the Division of Investment Management of the Commission or (ii) the 
Future Index Series will be listed on a national securities exchange 
without the need for a filing pursuant to rule 19b-4 under the Exchange 
Act.
    2. Each Index Series' prospectus will clearly disclose that, for 
purposes of the Act, Shares are issued by the Index Series and that the 
acquisition of Shares by investment companies is subject to the 
restrictions of section 12(d)(1) of the Act.
    3. As long as the Fund operates in reliance on the requested order, 
the Shares will be listed on a national securities exchange.
    4. Neither the Fund nor any Index Series will be advertised or 
marketed as an open-end fund or mutual fund. Each Index Series' 
prospectus will prominently disclose that Shares are not individually 
redeemable shares and will disclose that the owners of Shares may 
acquire those Shares from the Index Series and tender those shares for 
redemption to the Index Series in Creation Units only. Any advertising 
material that describes the purchase or sale of Creation Units or 
refers to redeemability will prominently disclose that Shares are not 
individually redeemable and that owners of Shares may acquire those 
Shares from the Index Series and tender those Shares for redemption to 
the Index Series in Creation Units only.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-9938 Filed 4-19-00; 8:45 am]
BILLING CODE 8010-01-M