[Federal Register Volume 64, Number 112 (Friday, June 11, 1999)]
[Notices]
[Pages 31658-31662]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-14873]


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SECURITIES AND EXCHANGE COMMISSION

[Rel. No. IC-23860; 812-10756]


WEBS Index Fund, Inc., et al.; Notice of Application

June 7, 1999.
AGENCY: Securities and Exchange Commission (``Commission'' or ``SEC'').

ACTION: Notice of application for an order under section 6(c) of the 
Investment Company Act of 1940 (the ``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 (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 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 (the ``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.

APPLICANTS: WEBS Index Fund, Inc. (the ``Fund''), Barclays Global Fund 
Advisors (the ``Adviser''), and Funds Distributor, Inc. (the 
``Distributor'').

FILING DATES: The application was filed on August 14, 1997. Applicants 
have agreed to file an amendment, the substance of which is reflected 
in this notice, during the notice period.

HEARING OR NOTIFICATION OF HEARING: An order granting the application 
will be issued unless the SEC orders a hearing. Interested persons may 
request a hearing by writing to the SEC's Secretary and serving 
applicants with a copy of the request, personally or by mail. Hearing 
requests should be received by the SEC by 5:30 p.m. on July 2, 1999, 
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 SEC's Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth Street, NW, Washington, DC 20549-
0609. Applicants, WEBS Index Fund, Inc., 400 Bellevue Parkway, 
Wilmington, Delaware 19809, Attn: Gary M. Gardner, Esq., Asst. 
Secretary.

FOR FURTHER INFORMATION CONTACT: Timothy Kane, Senior Counsel, at (202) 
942-0615, or Mary Kay Frech, 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 from 
the SEC's Public Reference Branch, 450 Fifth Street, NW, Washington, DC 
20549-0102 (tel. (202) 942-8090).

Applicants' Representations

    1. The Fund is an open-end management investment company 
incorporated in the State of Maryland and registered under the Act. The 
Adviser, an investment adviser registered under the Investment Advisers 
Act of 1940, serves as investment adviser to the Fund. The Distributor, 
a broker registered under the Securities Exchange Act of 1934 (the 
``Exchange Act'') and a member of the National Association of 
Securities Dealers, Inc., serves as the principal underwriter of the 
Fund's shares on an agency basis.
    2. Currently, the Fund has 17 series operating and now proposes to 
establish 11 new series (each such new series, a ``WEBS Index 
Series''). Each WEBS Index Series will invest in a portfolio of equity 
securities (``Portfolio Securities'') generally consisting of component 
securities of a specified securities index compiled by Morgan Stanley 
Capital International Inc. (collectively, the ``MSCI Indices'').\1\ The 
eleven proposed WEBS Index Series are the Brazil WEBS Index Series, the 
Greece WEBS Index Series, the Indonesia (Free) WEBS Index Series,\2\ 
the South Korea WEBS Index

[[Page 31659]]

Series, the Portugal WEBS Index Series, the Taiwan WEBS Index Series, 
the Thailand (Free) WEBS Index Series, the Turkey WEBS Index Series, 
the South Africa WEBS Index Series, the United States WEBS Index 
Series, and the EMU WEBS Index Series.
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    \1\ Each of the MSCI Indices is calculated by Morgan Stanley 
Capital International Inc. (``MSCI''). The trade price of the WEBS 
of each WEBS Index Series, as traded on the AMEX, will be 
disseminated over the facilities of the Consolidated Tape 
Association.
    \2\ MSCI calculates two indices in some countries in order to 
address the issue of restrictions on foreign ownership in such 
countries. The additional indices are called ``Free'' indices, and 
they include only companies and share classes which foreigners may 
purchase.
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    3. The investment objective of each WEBS Index Series will be to 
provide investment results that correspond generally to the price and 
yield performance of publicly traded securities in the markets that are 
represented by the particular MSCI Index. Each WEBS Index Series will 
be passively managed by the Adviser with the assistance of, among other 
things, computer analytics designed to help the Adviser select 
securities that will provide the returns of the relevant MSCI Index. A 
WEBS Index series generally will not hold all of the issues that 
comprise the subject MSCI Index. Instead, each WEBS Index Series will 
attempt to hold a representative sample of the securities in the 
subject index, which will be selected by the Adviser using quantitative 
analytical models in a technique known as ``portfolio sampling.'' \3\ 
Using portfolio sampling, a WEBS Index Series will normally not 
replicate exactly the particular index. The Adviser expects that, over 
time, the ``expected tracking error'' of a WEBS Index Series relative 
to the performance of its corresponding index will be less than 5 
percent.\4\
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    \3\ Under this technique, each stock in a benchmark index will 
be considered for inclusion in the portfolio of a WEBS Index Series 
based on its contribution to certain capitalization, industry, and 
fundamental investment characteristics. Subject to the need to 
comply with the diversification and other requirements of the 
Internal Revenue Code and other restrictions on portfolio 
management, the Adviser will seek to construct the portfolio of each 
WEBS Index Series so that, in the aggregate, its capitalization, 
industry, and fundamental investment characteristics perform like 
those of the subject MSCI Index. Certain WEBS Index Series may 
invest in securities that are not in its benchmark index to a 
limited extent.
    \4\ The tracking error will generally be greater for WEBS Index 
Series that have corresponding indices with fewer component stocks.
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    4. Shares of a WEBS Index Series (``WEBS'') will be sold in 
aggregations of 50,000 to 500,000 shares (``Creation Units'') depending 
on the WEBS Index Series. The price of a Creation Unit will be 
approximately $450,000 to $10,000,000 (based on the range of values of 
the Portfolio Securities of each WEBS Index Series as of April 30, 
1999).
    5. Creation Units may be purchased only by or through a Depository 
Trust Company (``DTC'') participant that has entered into an authorized 
participant agreement with the fund and the Distributor (``Authorized 
Participant''). WEBS generally will be issued in exchange for an in-
kind deposit of securities and cash. The Fund also may sell WEBS on a 
``cash only'' basis or permit a cash purchase option. An investor 
wishing to make an in-kind purchase of a Creation Unit from a WEBS 
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 to the returns on the relevant MSCI Index 
(``Deposit Securities''),\5\ (ii) a cash payment equal per Creation 
Unit to the dividends accrued on the Portfolio Securities of the WEBS 
Index Series since the last dividend payment on the Portfolio 
Securities, net of expenses and liabilities (the ``Dividend Equivalent 
Payment''), and (iii) a cash payment or credit to equalize any 
differences between (a) the sum of the market value per Creation Unit 
of the Deposit Securities and the Dividend Equivalent Payment and (b) 
the net asset value (``NAV'') per Creation Unit of the WEBS Index 
Series (the ``Balancing Amount'' and, together with the Dividend 
Equivalent Payment, the ``Cash Component'').\6\ Cash purchases of 
Creation Units will be made in the same manner as in-kind purchases 
except that an investor must pay the cash equivalent of the Deposit 
Securities. An investor purchasing a Creation Unit from a WEBS Index 
Series will be charged a purchase fee (``Transaction Fee'') to prevent 
the dilution of the interests of the remaining shareholders resulting 
from the WEBS Index Series incurring costs in connection with the 
purchase of the Creation Units.\7\ Each WEBS Index Series will disclose 
in its prospectus the Transaction Fees charged by the WEBS Index Series 
for both in-kind and cash purchases of Creation Units.
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    \5\ The identity and number of shares of the Deposit Securities 
required for each WEBS Index Series will change as rebalancing 
adjustments and corporate events are reflected from time to time by 
the Adviser. The composition of the Deposit Securities may also 
change in response to adjustments to the weighting or composition of 
the securities constituting an MSCI Index. The Fund may permit or 
require the substitution of an amount of cash for any Deposit 
Security that is unavailable in sufficient quantity or for other 
reasons.
    \6\ 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 WEBS Index Series that permits 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, the 
Fund will make available on each business day the Dividend 
Equivalent Payment effective through and including the previous 
business day, per outstanding WEBS of each WEBS Index Series, and 
the AMEX will make available throughout the trading day, the sum of 
the Dividend Equivalent Payment effective through and including the 
close of the previous trading session in the relevant securities 
market, plus the current value of the Deposit Securities as in 
effect on such day reflected in U.S. dollars at the prevailing 
exchange rate.
    \7\ To offset the Fund's brokerage and other transaction costs 
associated with using cash to purchase the requisite Deposit 
Securities, the investor will be required to pay a fixed purchase 
fee plus an additional variable charge expressed as a percentage of 
the Portfolio Deposit's NAV.
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    6. 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 WEBS Index Series to implement the 
delivery of Creation Units, and maintain records of the orders and the 
confirmations. The Distributors also will be responsible for delivering 
prospectuses to purchasers of Creation Units.
    7. Persons purchasing Creation Unit-size aggregations of WEBS from 
a WEBS Index Series may hold the WEBS or sell some or all of them in 
the secondary market. WEBS 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 WEBS. The 
price of WEBS traded on the AMEX will be based on a current bid/offer 
market, and each WEBS is expected to have a market value of less than 
$50 (based on the value of the Portfolio Securities of each WEBS Index 
Series as of April 30, 1999). Transactions involving the sale of WEBS 
in the secondary market will be subject to customary brokerage 
commissions and charges. Applicants expect that the price at which WEBS 
trade will be disciplined by arbitrage opportunities by the ability to 
continually purchase or redeem Creation Units at their NAV, which 
should ensure that WEBS will not trade at a material discount or 
premium in relation to their NAV.
    8. 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 WEBS, also may purchase WEBS for use 
in its market-making activities on the AMEX. Applicants expect that 
secondary market purchasers of WEBS will include both institutional and 
retail investors.\8\
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    \8\ WEBS will be registered in book-entry form only. DTC or its 
nominee will be the registered owner of all outstanding WEBS. 
Records reflecting the beneficial owners of WEBS will be maintained 
by DTC or its participants.

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[[Page 31660]]

    9. WEBS will not be individually redeemable. WEBS will only be 
redeemable in Creation Unit-size aggregations through each WEBS Index 
Series. To redeem an investor will have to accumulate enough WEBS to 
constitute a Creation Unit. An investor redeeming a Creation Unit 
generally will receive a portfolio of securities generally consisting 
of the Deposit Securities in effect on the date the redemption request 
is received, together with a ``Cash Redemption Payment'' consisting of 
an amount identical to the amount of the Cash Component and equal to a 
proportional amount of the Dividend Equivalent Payment, plus or minus 
the Balancing Amount. An investor may receive the cash equivalent of a 
Portfolio Security (i) if neither the investor nor the Authorized 
Participant acting in its behalf may take delivery of the Portfolio 
Security in the applicable jurisdiction, (ii) if it is not possible to 
make deliveries of the Portfolio Security in the jurisdiction, or (iii) 
in certain other circumstances.\9\ 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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    \9\ The Fund has a policy to permit residents of New Zealand and 
Australia to redeem Creation Units solely for cash because residents 
of those countries are subject to unfavorable tax consequences if 
they are eligible to receive in-kind redemption proceeds from the 
Fund.
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    10. Because each WEBS Index Series generally will redeem Creation 
Units in-kind, a WEBS Index Series will not have to maintain large cash 
reserves for redemptions. Even when a WEBS Index Series will require or 
allow cash redemptions, the WEBS Index Series will liquidate Portfolio 
Securities or utilize temporary bank borrowings in order to obtain the 
necessary cash. This will allow the assets of each WEBS Index Series to 
be committed as fully as possible to tracking its MSCI Index. 
Accordingly, applicants state that each WEBS Index Series will be able 
to track its MSCI Index more closely than certain other investment 
products that must allocate a greater portion of their assets to 
reserves for cash redemptions.
    11. Applicants state that no WEBS Index Series will be marketed or 
otherwise held out as a ``mutual fund.'' All marketing materials will 
refer to a WEBS Index Series as an ``investment company'' without 
reference to an ``open-end fund'' or ``mutual fund.'' Any advertising 
material where features of obtaining, buying or selling Creation Unit 
aggregations of WEBS are described, or where there is a reference to 
redeemability, will prominently disclose that WEBS are not redeemable 
and that owners of WEBS may acquire and tender WEBS for redemption to 
the Fund in Creation Unit aggregations only. The same type of 
disclosure will be provided in each WEBS Index Series' prospectus, 
statement of additional information (``SAI''), marketing or advertising 
materials published under rule 482 under the Securities Act of 1933 
(``Securities Act''), and all reports to shareholders.\10\ The Fund 
will provide copies of its annual and semi-annual shareholder reports 
to DTC participants for distribution to beneficial holders of WEBS.
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    \10\ 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. 
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 
WEBS, and sells WEBS directly to its customers; or if it chooses to 
couple the creation of a supply of new WEBS with an active selling 
effort involving solicitation of secondary market demand for WEBS. 
The prospectus 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 note that dealers who are not 
``underwriters'' but are effecting transactions in WEBS, whether or 
not participating in a distribution of WEBS, are generally required 
to deliver a prospectus because the prospectus delivery exemption in 
section 4(3) of the Securities Act is not available to such 
transactions under section 24(d) of the 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 (2) 
of the Act.
    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 WEBS 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 WEBS that are redeemable in Creation Unit 
aggregations. Applicants state that investors may purchase WEBS in 
Creation Units from each WEBS Index Series and redeem Creation Units 
through each WEBS 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 WEBS 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 WEBS 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 WEBS 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 WEBS. 
Applicants maintain while there is little legislation 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,

[[Page 31661]]

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 WEBS to trade in the secondary market at negotiated 
prices. Applicants state (i) that secondary market trading in WEBS 
would not cause dilution for owners of WEBS because such transactions 
do not directly involve Fund 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 WEBS 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 WEBS and 
their NAV generally 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 Portfolio S 
ecurities to redeeming investors, together with local market holiday 
schedules, will require a delivery process in excess of seven calendar 
days for some WEBS 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 WEBS Index Series may pay 
redemption proceeds up to twelve calendar days after the tender of WEBS 
for redemption.\11\ Except as otherwise subsequently disclosed in the 
prospectus or SAI for the relevant WEBS Index Series, applicants 
expect, however, that these WEBS Index Series will be able to deliver 
redemption proceeds within seven days at all other times.\12\
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    \11\ Specifically, applicants request that the (i) Brazil WEBS 
Index Series be permitted to make redemption payments up to ten 
calendar days after the tender of a Creation Unit for redemption, 
(ii) Indonesia (Free) WEBS Index Series be permitted to pay 
redemption proceeds up to twelve calendar days after the tender of a 
Creation Unit for redemption, (iii) South Korea WEBS Index Series be 
permitted to pay redemption proceeds up to ten calendar days after 
the tender of a Creation Unit for redemption, (iv) Taiwan WEBS Index 
Series be permitted to pay redemption proceeds up to eleven calendar 
days after tender of a Creation Unit for redemption, (v) Thailand 
(Free) WEBS Index Series be permitted to pay redemption proceeds up 
to ten calendar days after tender of a Creation Unit for redemption, 
(vi) Turkey WEBS Index Series be permitted to pay redemption 
proceeds up to ten calendar days after tender of a Creation Unit for 
redemption, and (vii) EMU WEBS Index Series be permitted to pay 
redemption proceeds up to twelve calendar days after tender of a 
Creation Unit for redemption. Applicants do not request relief from 
section 22(e) with respect to the other four WEBS Index Series.
    \12\ Applicants acknowledge that no relief obtained from the 
requirements of section 22(e) will affect any obligations applicants 
may otherwise have under rule 15c6-1 under the Exchange Act. Rule 
15c6-1 requires that most securities transactions be settled within 
three business days of the trade date.
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    8. The principal reason for the requested exemption is that 
settlement of redemptions for the WEBS 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 WEBS Index Series. Applicants 
believe that the Fund will be able to comply with the delivery 
requirement 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 WEBS redemption proceeds will occur 
principally due to local holidays. Applicants state that the local 
holidays relevant to each WEBS Index Series (for the following 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 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(a) may 
prohibit affiliated persons of a WEBS Index Series from purchasing or 
redeeming Creation Units in-kind. Because the definition of 
``affiliated person'' of another person in section 2(a)(3) 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 WEBS Index Series so long as fewer than twenty 
Creation Units are extant. Applicants request an exemption from section 
17(a) under sections 6(c) and 17(b), to permit affiliated persons of 
the WEBS 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 
affiliated persons of the WEBS Index Series described above from 
purchasing or redeeming Creation Units. The composition of a Portfolio 
Deposit made by a purchaser or given to a redeeming investor will be 
the same regardless of the investor's identity, and will be valued 
under the same objective standards applied to valuing the Portfolio 
Securities. Therefore, applicants state that in-kind purchases and 
redemptions will afford no opportunity for an affiliated person of a 
WEBS Index Series to effect a transaction detrimental to the other 
holders of WEBS. Applicants also believe that in-kind purchases and 
redemptions will not result in abusive self-dealing or overreaching by 
affiliated persons of the WEBS 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 new WEBS Index Series of the 
Fund, whether identical or similar to a WEBS Index Series, by means of 
filing a post-effective amendment to the Fund's registration statement 
or by any other means, unless applicants have requested and received 
with respect to such new series, either exemptive relief from the 
Commission or a no-action letter from the Division of Investment 
Management of the Commission.
    2. Each WEBS Index Series' prospectus will clearly disclose that, 
for purposes of the Act, WEBS are issued by the WEBS Index Series and 
that the acquisition of WEBS by investment companies is subject to the 
restrictions of section 12(d)(1) of the Act.

[[Page 31662]]

    3. As long as the Fund operates in reliance on the requested order, 
the WEBS will be listed on a national securities exchange.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-14873 Filed 6-10-99; 8:45 am]
BILLING CODE 8010-01-M