[Federal Register Volume 67, Number 153 (Thursday, August 8, 2002)]
[Notices]
[Pages 51614-51617]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-20066]


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SECURITIES AND EXCHANGE COMMISSION

Release No. 34-46298; File No. SR-NYSE-2002-27


Self-Regulatory Organizations; Notice of Filing and Order 
Granting Accelerated Approval of a Proposed Rule Change by the New York 
Stock Exchange, Inc. Relating to the iShares MSCI Japan Index Fund

August 1, 2002.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 
1934, the ``1934 Act'')\1\ and Rule 19b-4 thereunder,\2\ notice is 
hereby given that on July 24, 2002, the New York Stock Exchange, Inc. 
(``NYSE'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``SEC'' or ``Commission'') the proposed rule change as 
described in items I, II, and III below, which items have been prepared 
by the Exchange. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons and is 
approving the proposal on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The NYSE proposes to trade, on an unlisted trading privileges 
(``UTP'') basis, the iShares MSCI Japan Index Fund (``Fund''), which is 
a type of Investment Company Unit (``ICU'') and is considered an 
Exchange Traded (``ETF'').

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of and basis for the 
proposed rule change. The text of these statements may be examined at 
the places specified in item IV below and is set forth in Sections A, 
B, and C below.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange has adopted listing standards applicable to ICUs, 
which the Exchange states are consistent with the listing criteria 
currently used by the American Stock Exchange LLC (``Amex'') and other 
exchanges, and trading standards pursuant to which the Exchange may 
trade ICUs on the Exchange on a UTP basis.\3\ The Exchange now proposes 
to trade the Fund on a UTP basis. The Fund has been listed and actively 
traded on the Amex since 1996 \4\ and trades on other securities 
exchanges \5\ and in the over-the-counter market. The information below 
is intended to provide a description of how the Fund was created and is 
traded.\6\
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    \3\ In 1996, the Commission approved Section 703.16 of the 
NYSE's Listed Company Manual (``Manual''), which sets forth the 
rules related to the listing of ICUs. See Securities Exchange Act 
Release No. 36923 (March 5, 1996), 61 FR 10410 (March 13, 1996). In 
2000, the Commission also approved the Exchange's generic listing 
standards for the listing and trading, or the trading pursuant to 
UTP, of ICUs under Section 703.16 of the Manual and Exchange Rule 
1100. See Securities Exchange Act Release No. 43679 (December 5, 
2000), 65 FR 77949 (December 13, 2000).
    \4\ The Fund and other MSCI funds similar in nature were 
formerly known as World Equity Benchmark Securities (``WEBS'') and 
were approved for listing and trading on the Amex in 1996. See 
Securities Exchange Act Release No. 36947 (March 8, 1996), 61 FR 
10606 (March 14, 1996) (``Amex WEBS Approval Order'').
    \5\ See, e.g., Securities Exchange Act Release No. 39117 
(September 22, 1997), 62 FR 50973 (September 29, 1997) (approving 
the trading of WEBS on a UTP basis on the Chicago Stock Exchange, 
Inc.).
    \6\ Much of the information in this filing was taken from the 
Prospectus of iShares, Inc., dated as of January 1, 2002, as 
supplemented, and from the Web sites of the Amex (www.Amex.com) and 
iShares (www.iShares.com.) Fund information relating to Net Asset 
Value (``NAV''), returns, dividends component stock holdings and the 
like is updated on a daily basis of the Web sites.
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    Barclays Global Fund Advisors (the ``Advisor'' or ``BGFA'') is the 
investment adviser to the Fund. The Advisor is registered under the 
Investment Advisers Act of 1940. The Adviser is a wholly owned 
subsidiary of Barclays Global Investors, N.A. (``BGI''). BGI is a 
wholly owned indirect subsidiary of Barclays Bank PLC of the United 
Kingdom.\7\
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    \7\ Telephone conversation between Janet M. Kissane, Office of 
General Counsel, NYSE, and Florence E. Harmon, Senior Special 
Counsel, Division of Market Regulation (``Division''), Commission on 
August 1, 2002.
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    SEI Investments Distribution Co. (the ``Distributor''), a 
Pennsylvania corporation and broker-dealer registered under the 
Exchange Act, is the principal underwriter and distributor of Creation 
Unit Aggregations (as defined below) of iShares. The distributor is not 
affiliated with the Exchange or the Advisor.\8\
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    \8\ Telephone conversation between Janet M. Kissane, Office of 
General Counsel, NYSE, and Florence E. Harmonn, Senior Special 
Counsel, Division, Commission, on August 1, 2002.
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    The shares of the Fund are issued by iShares, Inc., and are based 
on the Morgan Stanley Capital International (``MSCI'') Japan Index. 
iShares, Inc. is an open-ended management investment company operating 
22 separate investment portfolios or ``index funds.'' The MSCI Japan 
Index (the ``Index'') is intended to represent the Japanese market. The 
Index consists of stocks traded primarily on the Tokyo Stock Exchange. 
As of July 16, 2002, the three largest stocks in the Index were Toyota 
Motor Corp., Sony Corp., and NTT DoCoMo Inc. The investment objective 
of the Fund is to seek investment results similar to the performance of 
the stock markets in Japan, as represented by the Index. The Fund uses 
a ``passive,'' or indexing, approach to attempt to produce investment 
results that approximate the investment performance of the Index. The 
Fund will normally invest at least 95% of its total assets in stock 
that are represented in the Index, and will, at all times, invest at 
least 90% of its total assets in such stocks. The Fund will not hold 
all of the stocks that comprise the Index, but will attempt to hold a 
representative sampling of the securities in the Index in a technique 
known as ``portfolio sampling.'' iShares, Inc. will issue and redeem 
the shares of the Fund only in aggregations of 600,000 shares (each 
aggregation a ``Creation Unit''), which had an estimated value of 
approximately $5 million as of January 1, 2002. On July 16, 2002, the 
NAV of the Fund was $8.36, and the Fund traded at a price of $8.25 per 
share. As of the same day, the Fund had total net assets of 
approximately $732,548,000 and 87,600,000 shares outstanding.
    MSCI generally seeks to have 85% of the free float-adjusted market 
capitalization of a country's stock

[[Page 51615]]

market reflected in the MSCI Index for such country. Thus, MSCI seeks 
to balance the inclusiveness of an ``all share'' index against the 
replicability of a ``blue chip'' index. The Index, as with all of the 
MSCI indices, is market capitalization weighted. The Index is 
calculated daily. The calculation method weights stocks in the index by 
their beginning-of-period market capitalization. Shares prices area 
``swept clean'' daily and adjusted for any rights issues, stock 
dividends, or splits. The Index is calculated in local currency and in 
U.S. dollars, without dividends and with gross dividends reinvested. 
Prices used to calculate the Index are the official exchange closing 
prices. All prices are taken from the dominant exchange in the Japanese 
market. To calculate the applicable foreign currency exchange rate, 
MSCI uses WM/Reuters Closing Spot Rates. Under exceptional 
circumstances, MSCI may elect to use an alternative exchange rate for 
any country if the WM/Reuters rate is believed not to be representative 
for the given currency on a particular day.
    The Index is calculated by MSCI for each trading day in the 
Japanese foreign exchange market based on official closing prices in 
such exchange market. For each trading day, MSCI publicly disseminates 
the Index value for the previous day's close. The Index is reported 
periodically in major financial publications and also is available 
through vendors of financial information. iShares, Inc. will cause to 
be made available daily the names and required number of shares of each 
of the securities to be deposited in connection with the issuance of 
the Fund shares in Creation Unit size aggregations for the fund, as 
well as information relating to the required cash payment representing, 
in part, the amount of accrued dividends for the Fund. This information 
will be made available to the Fund Advisor to any National Securities 
Clearing Corporation (``NSCC'') participant requesting such 
information. In addition, other investors can request such information 
directly from the Fund distributor. The NAV for the fund will be 
calcualted directly by the Fund administrator, PFPC, Inc. The NAV will 
also be made available to the public from the Fund distributor by means 
of a toll-free number and to NSCC participants through data made 
available from the NSCC.
    To provide current Fund pricing information, Amex disseminates 
through the facilities of the Consolidated Tape Association as 
``indicative optimized portfolio value'' (the ``Value'') for the Fund, 
as calculated by Bloomberg, L.P. The Value will be disseminated every 
fifteen seconds during regular Amex trading hours of 9:30 a.m. to 4 
p.m. Eastern Standard Time. The Value likely will not reflect the value 
of all securities included in the Index. In addition, the Value will 
not necessarily reflect the precise composition of the current 
portfolio of securities held by the Fund at a particular moment. The 
Value disseminated during Amex trading hours should not be viewed as a 
real-time update of the NAV of the Fund, which is calculated only once 
a day. It is expected, however, that during the trading day the Value 
will closely approximate the value per share of the portfolio of 
securities for the Fund except under unusual circumstances.
    The Exchange will distribute an information circular to its members 
in connection with the trading of the Fund. The circular will discuss 
the special characteristics and risks of trading this type of security. 
Specifically, the circular, among other things, will discuss what the 
Fund is, how it is created and redeemed, the requirement that members 
and member firms deliver a prospectus to investors purchasing shares of 
the Fund prior to or concurrently with the confirmation of a 
transaction,\9\ applicable Exchange rules, dissemination information, 
trading information and the applicability of suitability rules. The 
Exchange also intends to utilize its existing surveillance procedures 
to monitor trading in the Fund, including surveilling specialist 
compliance with Exchange Rule 460.10, which contemplates specialists 
engaging in transactions with iShares, Inc. under certain 
circumstances.\10\
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    \9\ The Commission has granted the Fund an exemption from 
section 24(d) of the Investment Company Act of 1940. See Investment 
Company Act Release No. 25623 (June 25, 2002). Thus, the Exchange, 
in an Informational Circular to Exchange members and member 
organizations, will inform members and member organizations, prior 
to commencement of trading, of the prospectus or Product Description 
delivery requirements applicable to iShares. Any product description 
used in reliance on the Section 24(d) exemptive order will comply 
with all representations made and all conditions contained in the 
Application for the Order. Telephone conversation between Janet M. 
Kissane, Office of General Counsel, NYSE, and Florence E. Harmon, 
Senior Special Counsel, Division, Commission, on August 1, 2002.
    \10\ The Exchange represents that Exchange Rule 460.10 generally 
precludes certain business relationships between an issuer and the 
specialist in the issuer's securities. The Exchange further 
represents that exceptions in the Rule permit specialists in ETF 
shares, to enter into Creation Unit transactions through the 
Distributor to facilitate the maintenance of a fair and orderly 
market. A specialist Creation Unit transaction may only be effected 
on the same terms and conditions as any other investor, and only at 
the NAV of the ETF shares. A specialist may acquire a position in 
excess of 10% of the outstanding issue of the ETF shares, provided, 
however, that a specialist registered in a security issued by an 
investment company may purchase and redeem the investment company 
unit or securities that can be subdivided or converted into such 
unit, from the investment company as appropriate to facilitate the 
maintenance of a fair and orderly market in the subject security.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act \11\ in general, and furthers the 
objectives of section 6(b)(5) of the Act \12\ in particular, in that it 
is designed to prevent fraudulent and manipulative acts and practices, 
to promote just and equitable principles of trade, to remove 
impediments to, and perfect the mechanism of a free and open market 
and, in general, to protect investors and the public interest.
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    \11\ 14 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

III. Commission's Findings and Order Granting Accelerated Approval 
of Proposed Rule Change

    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).\13\ The 
Commission believes that the Exchange's proposal to trade the Fund 
pursuant to UTP will provide investors with a convenient way of 
participating in foreign securities markets and can produce added 
benefits to investors through the increased competition between other 
markets trading the produce. Specifically, the Commission believes that 
NYSE's proposal should help provide investors with increased 
flexibility in satisfying their investment needs, by allowing them to 
purchase and sell at negotiated prices throughout the trading day 
securities that replicate the performance of several portfolios of

[[Page 51616]]

stock,\14\ and by increasing the availability of the Fund as an 
investment tool. Accordingly, as discussed below, the rule proposal is 
consistent with the requirements of Section 6(b)(5) that Exchange rules 
facilitate transactions in securities, remove impediments to, and 
perfect the mechanism of a free and open market and a national market 
system, and, in general, protect investors and the public interest, and 
is not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.\15\
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    \13\ 15 U.S.C. 78f(b)(5).
    \14\ The Commission notes that unlike typical open-end 
investment companies, where investors have the right to redeem their 
fund shares on a daily basis, investors in the Fund can redeem them 
in creation unit size aggregations only.
    \15\ 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).
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    As the Commission noted in greater detail in the order approving 
iShares (formally ``World Equity Benchmark Securities'' or ``WEBS'') 
for listing and trading on Amex,\16\ the estimated cost of an 
individual iShares, such as the Fund, should make it attractive to 
individual retail investors who wish to hold a security replicating the 
performance of a portfolio of foreign stocks. The Commission also notes 
that the Fund should provide investors with several advantages over 
standard open-end investment companies; in particular, investors can 
trade the Fund continuously throughout the day in secondary markets at 
negotiated prices.\17\ In contrast, Investment Company Act of 1940 
(``Investment Company Act'') Rule 22c-1 \18\ limits holders and 
prospectus holders of open-end management investment company shares to 
purchasing or redeeming securities of the fund based on the net asset 
value of the securities held by the fund as designated by the board of 
directors. Thus, the Fund should allow investors to respond quickly to 
market changes through intra-day trading opportunities, expand the 
opportunity for retail investors to engage in hedging strategies, and 
reduce transaction costs for trading a portfolio of stocks. The 
Commission notes that, under the proposed rule change, the benefits of 
the Fund will now be available to investors trading on NYSE, and 
believes that the addition of their trading on NYSE pursuant to UTP 
could produce added benefits to investors through the increased 
competition.
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    \16\ See Amex WEBS Approval Order, supra note 4. The Commission 
hereby incorporates by reference the discussion and rational for 
approving WEBS provided in the Amex WEBS Approval Order.
    \17\ The Commission believes that the Fund will not trade at a 
material discount or premium in relation to their NAV, because of 
potential arbitrage opportunities. See Amex WEBS Approval Order, 
supra note 4. The mere potential for arbitrage should keep the 
market price of Fund shares comparable to their NAVs; therefore, 
arbitrage activity likely will not be significant. In addition, the 
Fund will redeem in-kind, thereby enabling the Fund to invest 
virtually all of its assets in securities comprising the MSCI Index.
    \18\ 17 CFR 270.22c-1. Investment Company Act Rule 22c-1 
generally provides that a registered investment company issuing a 
redeemable security, its principal underwriter, and dealers in that 
security may sell, redeem, or repurchase the security only at a 
price based on the NAV next computed after receipt of an investor's 
request to purchase, redeem, or resell. The NAV of an open-end 
management investment company generally is computed once daily 
Monday to Friday as designated by the investment company's board of 
directors. The Commission granted WEBS an exemption from this 
provision to allow them to trade in the secondary market at 
negotiated prices. See Amex WEBS Approval Order, supra note 4.
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    The Commission notes that, although the value of the Fund is based 
on the value of the securities and cash held in the Fund, Fund shares 
are not leveraged instruments. Fund shares are essentially equity 
securities that represent an interest in a portfolio of stocks designed 
to reflect substantially the applicable MSCI Index. Accordingly, it is 
appropriate to regulate the Fund in a manner similar to other equity 
securities. Nonetheless, the Commission believes that the unique nature 
of the Fund raises certain disclosure, trading, and other issues that 
need to be addressed. The remainder of this section addresses these 
issues, although they are discussed in greater detail in the Amex WEBS 
Approval Order, where the Commission initially approved WEBS for 
trading as a new product.

A. Trading of the Fund on NYSE Pursuant to UTP

    The Commission notes that, pursuant to Rule 12f-5 under the 
Act,\19\ prior to trading a particular class or type of security 
pursuant to UTP, NYSE must have listing standards comparable to those 
of the primary market on which the security is listed. The Commission 
finds that adequate rules and procedures exist to govern the trading of 
the Fund on NYSE, pursuant to UTP. Fund shares will be deemed equity 
securities subject to NYSE's rules governing the trading of equity 
securities. Accordingly, the Exchange's existing general rules that 
currently apply to the trading of equity securities will also apply to 
the Fund. In addition, Section 703.16 of the NYSE's Manual and Exchange 
Rule 1100 \20\ which contain specific listing and delisting criteria to 
accommodate the trading of Units, will apply to the trading of the 
Fund.\21\ These criteria should help to ensure that a minimum level of 
liquidity will exist in each iShares series to allow for the 
maintenance of fair and orderly markets. The delisting criteria allow 
the Exchange to consider the suspension of trading and the delisting of 
a series of Units, including suspending trading in the Fund traded on 
the Exchange pursuant to UTP, if an event were to occur that made 
further dealings in such securities inadvisable. This will give the 
Exchange flexibility to suspend training in the Fund if circumstances 
warrant such action. Accordingly, the Commission believes that NYSE's 
equity rules in general, and Section 703.16 of the Manual and Exchange 
Rule 1100 in particular, provide adequate safeguards to prevent 
manipulative acts and practices and to protect investors and the public 
interest.\22\
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    \19\ 17 CFR 240.12f-5.
    \20\ The Commission approval generic rules for the listing and 
trading of ICUs on NYSE in 2000. See Securities Exchange Act Release 
No. 43679 (December 5, 2000), 65 FR 77949 (December 13, 2000).
    \21\ The Commission notes the listing and delisting criteria is 
similar to those adopted by Amex to trade WEBS/iShares.
    \22\ The Commission also believes that the proposed rule change 
should help protect investors and the public interest, and help 
perfect the mechanisms of a national market system, in that it will 
allow for the trading of the Fund on NYSE pursuant to UTP, making 
the Fund more broadly available to the investing public.
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B. Disclosure

    The Commission believes that NYSE's proposal should provide for 
adequate disclosure to investors relating to the terms, 
characteristics, and risks of trading the Fund. All investors in the 
Fund, including those purchasing the Fund on NYSE pursuant to UTP, will 
receive a prospectus or a Product Description \23\ regarding the 
product. The prospectus or Product Description will address the special 
characteristics of the Fund, including a statement regarding their 
redeemability and method of creation, and that Fund shares are not 
individually redeemable.
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    \23\ See Investment Company Release No. 25623 (June 25, 2002).
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    The Commission notes that the Exchange has represented that it will 
also distribute an information circular to all NYSE members prior to 
the commencement of trading of the Fund explaining the unique 
characteristics and risks of the Fund. The circular will note, for 
example, Exchange member responsibilities, including that, before an 
Exchange member undertakes to recommend a transaction in the Fund, it 
should make a determination that it is in compliance with applicable 
rules of other self-regulatory organizations of which it is a member, 
including

[[Page 51617]]

suitability rules.\24\ The circular will also address members' 
responsibility to deliver a prospectus or product description to all 
investors purchasing the Fund, as well as highlight the characteristics 
of the Fund, including that Fund shares are only redeemable in Creation 
Unit size aggregation.\25\
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    \24\ Telephone conversation between Janet M. Kissane, Office of 
General Counsel, NYSE, and Sapna C. Patel, Attorney, Division, 
Commission, on July 29, 2002.
    \25\ The Commission notes that the information circular should 
also discuss exemptive relief granted by the Commission from certain 
rules under the Act. The applicable rules are: Rule 10a-1; Rule 10b-
10; Rule 14e-5; Rule 10b-17; Rule 11d1-2; Rules 15c1-5 and 15c1-6; 
and Rules 101 and 102 of Regulation M under the Exchange Act.
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C. Dissemination of the Fund Portfolio Information

    The Commission believes that since Amex is disseminating the Values 
for the various WEBS/iShares series, investors will be provided with 
timely and useful information concerning the value of iShares, on a per 
iShares basis. The Commission notes that the information is 
disseminated through facilities of the CTA and reflects the currently 
available information concerning the value of the assets comprising the 
deposit securities. The information is disseminated every fifteen 
seconds during the hours of 9:30 a.m. to 4 p.m. Eastern Standard Time 
and will be available to all investors, irrespective of where the 
transaction is executed. In addition, because the value is expected to 
closely track the applicable iShares series, the Commission believes 
the Values will provide investors with adequate information to 
determine the intra-day value of a given iShares series, such as the 
Fund.\26\ In the Amex WEBS Approval Order, the Commission noted that it 
expected Amex to monitor the disseminated Value, and if Amex determines 
that the Value does not closely track applicable WEBS/iShares series, 
it will arrange to disseminate an adequate alternative.
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    \26\ In addition, the Amex WEBS Approval Order states that the 
statement of additional information (``SAI'') to the preliminary 
prospectus states that each series will calculate its NAV per share 
at the close of the regular trading session for the Amex on each day 
that the Amex is open for business. NAV generally will be based on 
the last quoted sales price on the exchange where the security 
primarily is traded. See Amex WEBS Approval Order, supra note 4.
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D. Surveillance

    The Commission notes that NYSE has submitted surveillance 
procedures for the Fund and believes that those procedures are adequate 
to address concerns associated with the listing and trading of such 
securities, including any concerns associated with specialists 
purchasing and redeeming Creation Units. The Exchange has represented 
that its surveillance procedures should allow it to identify situations 
where specialists purchase or redeem Creation Units to ensure 
compliance with NYSE Rule 460.10, which requires that such purchases or 
redemptions facilitate the maintenance of a fair and orderly market in 
the subject security.\27\
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    \27\ The Commission notes that, in the Amex WEBS Approval Order, 
it discussed the concerns raised when a broker-dealer is involved in 
the development, maintenance, and calculation of a stock index upon 
which a product such as WEBS is based. Adequate procedures to 
prevent the misuse of material, non-public information regarding 
changes to component stocks in an MSCI Index have been adopted and 
should help to address concerns raised by Morgan Stanley's 
involvement in the management of the Indices. See also the 
``firewall'' requirements under Section 703.16 of the NYSE's Manual.
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E. Specialists

    The Commission finds that it is consistent with the Act to allow a 
specialist registered in a security issued by an Investment Company to 
purchase or redeem the listed security from the issuer as appropriate 
to facilitate the maintenance of a fair and orderly market in that 
security. The Commission believes that such market activities should 
enhance liquidity in such security and facilitate a specialist's market 
making responsibilities. In addition, because the specialist only will 
be able to purchase and redeem Fund shares on the same terms and 
conditions as any other investor (and only at the NAV), and Creation 
transactions must occur through the distributor and not directly with 
the issuer, the Commission believes that concerns regarding potential 
abuse are minimized. As noted above, the Exchange's surveillance 
procedures also should ensure that such purchases are only for the 
purpose of maintaining fair and orderly markets, and not for any other 
improper or speculative purposes. Finally, the Commission notes that 
its approval of this aspect of the Exchange's rule proposal does not 
address any other requirements or obligations under the federal 
securities laws that may be applicable.\28\
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    \28\ The Commission notes that with respect to iShares, broker-
dealers and other persons are cautioned in the prospectus and/or the 
Fund's 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 provision 
of the Securities Act of 1933.
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F. Accelerated Approval

    After careful review, the Commission finds good cause for approving 
the proposed rule change prior to the thirtieth day after the date of 
publication of notice thereof in the Federal Register pursuant to 
section 19(b)(2) of the Act.\29\ The Commission finds that this 
proposal is similar to several approved instruments currently listed 
and traded on the Exchange. Accordingly, the Commission finds that the 
listing and trading of the Fund on a UTP basis is consistent with the 
Act, and promote just and equitable principles of trade, foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, and, in general, protect 
investors and the public interest.\30\ The Commission further finds 
that accelerated approval will enable the Exchange to begin listing and 
trading the Fund on the Exchange on a UTP basis immediately. The 
Commission therefore approves this proposal on an accelerated basis.
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    \29\ 15 U.S.C. 78s(b)(2).
    \30\ 15 U.S.C. 78f(b)(5).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street NW., Washington, DC 20549. Copies 
of the submission, all subsequent amendments, all written statements 
with respect to the proposed rule change that are filed with the 
Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for inspection and copying in the 
Commission's Public Reference Room.
    Copies of such filing will also be available for inspection and 
copying at the principal office of the NYSE. All submissions should 
refer to the file number SR-NYSE-2002-27 and should be submitted by 
August 29, 2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\31\
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    \31\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-20066 Filed 8-7-02; 8:45 am]
BILLING CODE 8010-01-M