[Federal Register Volume 70, Number 16 (Wednesday, January 26, 2005)]
[Notices]
[Pages 3749-3756]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-283]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51058; File No. SR-Amex-2004-38]


Self-Regulatory Organizations; Order Granting Approval of 
Proposed Rule Change and Amendment Nos. 2, 3 and 4 and Notice of Filing 
and Order Granting Accelerated Approval to Amendment No. 5 by the 
American Stock Exchange LLC Relating to the Listing and Trading of the 
iShares[reg] COMEX Gold Trust

January 19, 2005.

I. Introduction

    On May 24, 2004, the American Stock Exchange LLC (``Amex'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') 1 and Rule 19b-4 
thereunder,2 a proposed rule change to list and trade under 
new Amex Rules 1200A et seq. iShares[reg] COMEX Gold Trust Shares 
(``Gold Shares''). On November 9, 2004, Amex amended its proposal; 
however, the Exchange withdrew this amendment on November 17, 2004. On 
November 10, 2004 the Exchange submitted a second 
amendment.3 On November 16, 2004, the Exchange submitted a 
third amendment.4 On December 1, 2004, the Exchange 
submitted a fourth amendment.5 The proposed rule change, as 
amended, was published for comment in the Federal Register on December 
9, 2004.6 The Commission received no comment letters 
regarding the proposed rule change. On January 7, 2005, the Exchange 
submitted a fifth amendment.7 This notice and order

[[Page 3750]]

approves the Exchange's rule change, and Amendments 2, 3 and 4 thereto, 
solicits comment from interested persons on Amendment No. 5, and 
approves Amendment No. 5 on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Amendment No. 2, dated November 10, 2004 (``Amendment 
No. 2''). In Amendment No. 2, the Exchange revised the proposed rule 
text and corresponding description. Amendment No. 2 replaced Amex's 
original filing in its entirety.
    \4\ See Amendment No. 3, dated November 16, 2004 (``Amendment 
No. 3''). In Amendment No. 3, the Exchange proposed clarifying 
changes to certain aspects of Amendment No. 2 and modified the 
proposed rule text.
    \5\ See Amendment No. 4, dated December 1, 2004 (``Amendment No. 
4''). In Amendment No. 4, the Exchange provided additional 
description of the creation and redemption process for the Gold 
Trust shares and made clarifying changes to the proposed rule text. 
Amendment No. 4 replaced Amex's amended proposal in its entirety.
    \6\ See Securities Exchange Act Release No. 50792 (December 3, 
2004), 69 FR 71446 (``Notice'').
    \7\ See Amendment No. 5, dated January 7, 2005 (``Amendment No. 
5''). In Amendment No. 5, the Exchange proposed changes to 
Commentary .01 to Rule 1202A for the purpose of clarifying that the 
Exchange will submit separate rule filings under section 19(b)(2) of 
the Act in connection with the listing and trading of each series of 
Commodity-Based Trust Shares. Further, in Amendment No. 5 the 
Exchange represented that (1) as provided in the Registration 
Statement to the Trust, the trustee will charge a transaction fee in 
connection with the redemption and/or creation of Baskets; (2) 
Barclays Capital, Inc., the Initial Purchaser, will purchase 150,000 
Shares of the Trust to compose the initial Baskets; and (3) the 
Exchange's surveillance procedures are adequate to properly monitor 
the trading of the Shares.
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II. Description of Proposal

    The Amex proposes to add new Exchange Rules 1200A et seq. for the 
purpose of permitting the listing and trading of Trust Issued Receipts 
8 based on commodity interests (``Commodity-Based Trust 
Shares''), and to amend Sections 140 and 141 of the Amex Company Guide 
regarding original and annual listing fees applicable to such shares. 
Amex Rule 1201A will permit the Exchange to list and trade Commodity-
Based Trust Shares. Under the rule, for each series of Commodity-Based 
Trust Shares, the Exchange will submit for Commission review and 
approval a filing pursuant to Section 19(b) of the Act.9 
Proposed Amex Rule 1202A sets forth initial and continued listing and 
trading criteria for Commodity-Based Trust Shares.10
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    \8\ A Trust Issued Receipt or ``TIR'' is defined in Exchange 
Rule 1200(b) as a security (a) that is issued by a trust that holds 
specified securities deposited with the trust; (b) that, when 
aggregated in some specified minimum number, may be surrendered to 
the trust by the beneficial owner to receive the securities; and (c) 
that pays beneficial owners dividends and other distributions on the 
deposited securities, if any are declared and paid to the trustee by 
an issuer of the deposited securities. Under Amex Rule 1201, the 
Exchange may approve for listing and trading TIRs based on one or 
more securities. The Exchange defines a ``security'' or 
``securities'' to include stocks, bonds, options, and other 
interests or instruments commonly known as securities. See Article 
I, section 3(j) of the Amex Constitution.
    \9\ 15 U.S.C. 78s(b). Because of the structure of the Gold 
Trust, representing an interest in underlying gold, the Exchange's 
existing listing and trading rules that permit the listing and 
trading of TIRs, pursuant to Rule 19b-4(e) under the Act, 17 CFR 
240.19b-4(e), cannot be used to list this product.
    \10\ Proposed Rule 1202A for Commodity-Based Trust Shares tracks 
but is not identical to current Rule 1202 relating to TIRs. The 
initial listing standards set forth in Rule 1202(a) provide that the 
Exchange establish a minimum number of TIRs required to be 
outstanding at the time of the commencement of trading on the 
Exchange. As set forth in the section ``Criteria for Initial and 
Continued Listing,'' the Exchange represents that the minimum number 
of Gold Shares outstanding at the time of trading will be 150,000. 
See Amendment No. 5, supra note 7.
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    The Amex initially proposes to list iShares COMEX 11 
Gold Trust (the ``Gold Trust'' or ``Trust'') shares that represent 
beneficial ownership interests in the net assets of a trust that holds 
gold bullion. As explained further herein, Gold Shares will be issued 
in baskets. Initially, each basket of 50,000 shares will correspond to 
5,000 troy ounces of gold. Thus, each Gold Share will correspond to 
one-tenth of a troy ounce of gold.12 The Gold Shares will 
conform to the initial and continued listing criteria under proposed 
Rule 1202A. The Gold Trust will be formed under a depositary trust 
agreement among Bank of New York (``BNY''), the Trustee; Barclays 
Global Investors, N.A. (``Barclays''), the Sponsor; all depositors; 
13 and the holders of Gold Shares.14
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    \11\ COMEX is a division of the New York Mercantile Exchange, 
Inc. (``NYMEX'') where gold futures contracts are traded.
    \12\ The amount of gold associated with each basket (and 
individual Gold Share) is expected to decrease over time as the 
Trust incurs and pays maintenance fees and other expenses.
    \13\ Barclays Capital, Inc., the Initial Purchaser, will 
purchase 150,000 Shares of the Trust to compose the initial Baskets. 
See Amendment No. 5, supra note 7.
    \14\ The Trust is not an investment company as defined in 
section 3(a) of the Investment Company Act of 1940 (the ``1940 
Act'').
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    In effect, purchasing Gold Shares will provide investors a new 
mechanism to participate in the gold market. The Trustee will not 
actively manage the gold held by the Trust. Information about the 
liquidity, depth, and pricing mechanisms of the international gold 
market, management and structure of the Trust, and description of the 
Gold Shares follows below.

A. Description of the Gold Market

    The global trade in gold consists of over-the-counter (``OTC'') 
transactions in spot, forwards, and options and other derivatives, 
together with exchange-traded futures and options on futures. In its 
filing with the Commission, the Exchange made the following 
representations regarding the worldwide gold market.\15\
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    \15\ For more information on the gold market and gold supply and 
demand, see Notice, supra note 6.
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 1. The OTC Market
    The OTC market trades on a 24-hour continuous basis and accounts 
for the substantial portion of global gold trading. Liquidity in the 
OTC market can vary from time to time during the course of the 24-hour 
trading day. Fluctuations in liquidity are reflected in adjustments to 
dealing spreads--the differential between a dealer's buy and sell 
prices. The period of greatest liquidity in the gold market is 
typically that time of day when trading in the European time zone 
overlaps with trading in the United States. This occurs when the OTC 
market trading in London, New York, and other centers coincides with 
futures and options trading on the COMEX.\16\ This period lasts for 
approximately four (4) hours each New York business day morning.
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    \16\ The open outcry trading hours of the COMEX gold futures 
contract is from 8:20 a.m. to 1:30 p.m. New York time Monday through 
Friday. NYMEX ACCESS([reg]), an electronic trading system, is open 
for trading on COMEX gold futures contracts from 2 p.m. Monday 
afternoon until 8 a.m. Friday morning New York time; and from 7 p.m. 
Sunday night until Monday morning at 8 a.m. New York time. See 
Amendment No. 4, supra note 5, at note 4.
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    The OTC market has no formal structure and no open-outcry meeting 
place. The main centers of the OTC market are London, New York, and 
Zurich. Bullion dealers have offices around the world, and most of the 
world's major bullion dealers are either members or associate members 
of the London Bullion Market Association (``LBMA''), a trade 
association of participants in the London Bullion market.
    The Exchange states that there are no authoritative published 
figures for overall world-wide volume in gold trading. There are 
certain published sources that do suggest the significant size of the 
overall market. The LBMA publishes statistics compiled from the five 
(5) members offering clearing services.\17\ The Exchange notes that the 
monthly average daily volume figures published by the LBMA for 2003 
range from a high of 19 million to a low of 13.6 million troy ounces 
per day. Through September 2004, the monthly average daily volume has 
ranged from a high of 17 million to a low of 12.4 million. The Exchange 
also notes that the COMEX publishes price and volume statistics for 
transactions in contracts for the future delivery of gold. COMEX 
figures for 2003 indicate that the average daily volume for gold 
futures and options contracts was 4.89 million (48,943 contracts) and 
1.7 million (17,241 contracts) troy ounces per day, respectively. 
Through October 2004, the average daily volume for gold futures

[[Page 3751]]

and options was 6.08 million (60,817 contracts) and 2.01 million 
(20,173 contracts), respectively.\18\
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    \17\ Information regarding clearing volume estimates by the LBMA 
can be found at http://www.lbma.org.uk/clearing_table.htm. The 
three measures published by LBMA are: Volume, the amount of metal 
transferred on average each day measured in millions of troy ounces; 
value, measured in U.S. dollars, using the monthly average London PM 
fixing price; and the number of transfers, which is the average 
number recorded each day. The statistics exclude allocated and 
unallocated balance transfers where the sole purpose is for 
overnight credit and physical movements arranged by clearing members 
in locations other than London.
    \18\ Information regarding average daily volume estimates by the 
COMEX can be found at http://www.nymex.com/jsp/markets.md_annual_volume6.jsp#2. The statistics are based on gold futures contracts, 
each of which relates to 100 troy ounces of gold.
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2. Futures Exchanges
    The Exchange states that the most significant gold futures 
exchanges are the COMEX division of the NYMEX and the Tokyo Commodity 
Exchange (``TOCOM'').\19\ Trading on these exchanges is based on fixed 
delivery dates and transaction sizes for the futures and options 
contracts traded.
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    \19\ The Exchange notes that there are other gold exchange 
markets, such as the Istanbul Gold Exchange, the Shanghai Gold 
Exchange, and the Hong Kong Chinese Gold & Silver Exchange Society.
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    The daily settlement price for COMEX gold futures contracts is 
publicly available on the NYMEX Web site at http://www.nymex.com.\20\ 
The Exchange on its Web site at http://www.amex.com will include a 
hyperlink to the NYMEX Web site for the purpose of disclosing gold 
futures contract pricing. In addition, the Exchange represents that 
COMEX gold futures prices, options on futures quotes, and last sale 
information are widely disseminated through a variety of market data 
vendors worldwide, including Bloomberg and Reuters. The Exchange 
further represents that complete real-time data for COMEX gold futures 
and options is available by subscription from Reuters and Bloomberg. 
The NYMEX also provides delayed futures and options information on 
current and past trading sessions and market news free of charge on its 
Web site at http://www.nymex.com. The contract specifications for COMEX 
gold futures contracts are also available from the NYMEX at its Web 
site at http://www.nymex.com, as well as other financial informational 
sources.
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    \20\ The COMEX daily settlement price for each gold futures 
contract is established by a subcommittee of COMEX members shortly 
after the close of regular trading on the COMEX. NYMEX Rule 3.43 
sets forth the composition of the subcommittee requiring that it 
consist of three (3) members that represent the gold market. 
Specifically, the Rule calls for the subcommittee to include a floor 
broker, a floor trader, and one who represents the trade. Rule 3.02 
provides restrictions on Committee members and others who possess 
material, non-public information. A Committee Member is prohibited 
from disclosing for any purpose other than the performance of 
official duties relating to the Committee, material, non-public 
information obtained as a result of such person's participation on 
the Committee. In addition, no person may trade for his own account 
or for or on behalf of any other account, in any commodity interest 
on the basis of any material, non-public information that such 
person knows was obtained from such Committee member in violation of 
Rule 3.02. Telephone conversation between Jeffrey Burns, Associate 
General Counsel, Amex, and Florence Harmon, Senior Special Counsel, 
Division of Market Regulation, Commission, on December 3, 2004.
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3. Gold Market Regulation
    There is no direct regulation of the global OTC market in gold. 
However, indirect regulation of some of the overseas participants does 
occur in some capacity. In the United Kingdom, responsibility for the 
regulation of financial market participants, including the major 
participating members of the LBMA, falls under the authority of the 
Financial Services Authority (``FSA'') as provided by the Financial 
Services and Market Act of 2000 (``FSM Act''). Under the FSM Act, all 
UK-based banks, together with other investment firms, are subject to a 
range of requirements, including fitness and properness, capital 
adequacy, liquidity, and systems and controls. The FSA is responsible 
for regulating investment products, including derivatives, and those 
who deal in investment products. Regulation of spot, commercial 
forwards, and deposits of gold and silver not covered by the FSM Act is 
provided for by The London Code of Conduct for Non-Investment Products, 
which was established by market participants in conjunction with the 
Bank of England, and is a voluntary code of conduct among market 
participants.
    The Exchange states that participants in the United States OTC 
market for gold are generally regulated by their institutional 
supervisors, which regulate their activities in the other markets in 
which they operate. For example, participating banks are regulated by 
the banking authorities. In the United States, the Commodity Futures 
Trading Commission (``CFTC''), an independent government agency with 
the mandate to regulate commodity futures and options markets in the 
United States, regulates market participants and has established rules 
designed to prevent market manipulation, abusive trade practices, and 
fraud.
    The Exchange states that TOCOM has authority to perform financial 
and operational surveillance on its members' trading activities, 
scrutinize positions held by members and large-scale customers, and 
monitor price movements of futures markets by comparing them with cash 
and other derivative markets' prices.

B. Trust Management and Structure

    The Exchange proposes to list and trade Gold Shares, which 
represent units of fractional undivided beneficial interest in and 
ownership of the Trust. The purpose of the Trust is to hold gold 
bullion.\21\ The investment objective of the Trust is for the Gold 
Shares to reflect the performance of the price of gold, less the 
Trust's expenses.
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    \21\ The Commission has previously approved the listing of 
products for which the underlying was a commodity or otherwise was 
not a security trading on a regulated market. See, e.g., Securities 
Exchange Act Release Nos. 19133 (October 14, 1982) (approving the 
listing of standardized options on foreign currencies); 36505 
(November 22, 1995) (approving the listing of dollar-denominated 
delivery foreign currency options on the Japanese Yen); and 36165 
(August 29, 1995) (approving listing standards for, among other 
things, currency and currency index warrants).
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    The Trust is an investment trust and is not managed like a 
corporation or an active investment vehicle. The Trust has no board of 
directors or officers or persons acting in a similar capacity. The 
Exchange states that the Trust is not a registered investment company 
under the 1940 Act and is not required to register under such Act. The 
Sponsor (Barclays), Trustee (BNY), and Custodian (The Bank of Nova 
Scotia) are not affiliated with one another or with the Exchange.

C. Trust Expenses and Management Fees

    Generally, the assets of the Trust (e.g., gold bullion) will be 
sold to pay Trust expenses and management fees. These expenses and fees 
will reduce the value of an investor's Gold Share as gold bullion is 
sold to pay such costs. Ordinary operating expenses of the Trust 
include (1) fees paid to the Sponsor, (2) fees paid to the Trustee, (3) 
fees paid to the Custodian, and (4) various Trust administration fees, 
including printing and mailing costs, legal and audit fees, 
registration fees, and Amex listing fees. The Trust's estimated 
ordinary operating expenses are accrued daily and reflected in the net 
asset value (``NAV'') of the Trust.

D. Description and Characteristics of the Gold Shares

1. Liquidity
    The Exchange represents that a minimum of 150,000 Gold Shares will 
be outstanding at the start of trading.\22\ The minimum number of 
shares required to be outstanding at the start of trading is comparable 
to requirements that have been applied to previously listed series of 
trust issues receipts, Portfolio Depository Receipts and Index Fund 
Shares.
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    \22\ See Amendment No. 5, supra note 7.
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    While the Gold Shares will trade on the Amex until 4:15 p.m. New 
York time, liquidity in the OTC market for gold generally decreases 
after 1:30 p.m. New York time when daily trading at

[[Page 3752]]

COMEX and other world gold trading centers ends. Trading spreads and 
the resulting premium or discount on the Gold Shares may widen as a 
result of reduced liquidity in the OTC gold market. The Exchange does 
not believe that the Gold Shares will trade at a material discount or 
premium to the value of the underlying gold held by the Trust because 
of arbitrage opportunities.
2. Creation and Redemption of Trust Shares
    Gold Shares will be issued only in baskets of 50,000 shares or 
multiples thereof (such aggregation referred to as the ``Basket 
Aggregation'' or ``Basket''). The Trust will issue and redeem the Gold 
Shares on a continuous basis, by or through participants that have 
entered into participant agreements (each, an ``Authorized 
Participant'') \23\ with the Sponsor, Barclays, and the Trustee, BNY, 
at the NAV per share next determined after an order to purchase or 
redeem Gold Shares in a Basket Aggregation is received in proper form. 
Authorized Participants are the only persons that may place orders to 
create and redeem Baskets. Authorized Participants purchasing Baskets 
will be able to separate a Basket into individual Gold Shares for 
resale.
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    \23\ An ``Authorized Participant'' is a person, who at the time 
of submitting to the trustee an order to create or redeem one or 
more Baskets, (i) is a registered broker-dealer, (ii) is a 
Depository Trust Company (``DTC'') Participant or an Indirect 
Participant, and (iii) has in effect a valid Authorized Participant 
Agreement.
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    Basket Aggregations will be issued in exchange for a corresponding 
amount of gold, measured in fine ounces (the ``Basket Gold Amount''). 
Similarly, the Trust will redeem Basket Aggregations of Gold Shares 
based on the Basket Gold Amount. The Basket Gold Amount will be 
determined at or about 4 p.m. each business day by the Trustee, 
BNY.\24\ Initially, creation of a Basket will require 5,000 ounces of 
gold. This Basket Gold Amount will change from day to day and decrease 
over the life of the Trust due to the payment or accrual of fees and 
other expenses payable by the Trust. On each day that the Amex is open 
for regular trading, the BNY will adjust the quantity of gold 
constituting the Basket Gold Amount as appropriate to reflect sales of 
gold, any loss of gold that may occur, and accrued expenses.\25\ The 
BNY will determine the Basket Gold Amount for a given business day by 
multiplying the NAV, as described below, for each Gold Share by the 
number of Gold Shares in each Basket (50,000) and dividing the 
resulting product by that day's COMEX settlement price for the spot 
month gold futures contract. Authorized Participants that submitted an 
order prior to 4 p.m. to purchase a Basket must transfer the Basket 
Gold Amount to the Trust in exchange for a Basket.
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    \24\ At the same time, the BNY will also determine an 
``Indicative Basket Gold Amount'' that Authorized Participants can 
use as an indicative amount of gold to be deposited for issuance of 
the Gold Shares on the next business day. The Trustee will 
disseminate daily the Indicative Basket Gold Amount on the Trust Web 
site. Because the creation/redemption process is based entirely on 
the physical delivery of gold (and does not contemplate a cash 
component), the actual number of fine ounces required for the 
Indicative Basket Gold Amount will not change intraday, even though 
the value of the Indicative Basket Gold Amount may change based on 
the market price of gold.
    \25\ The Trust's expense ratio, in the absence of any 
extraordinary expenses and liabilities, is established at 0.40% of 
the net assets of the Trust. As a result, the amount of gold by 
which the Basket Gold Amount will decrease each day will be 
predictable (i.e. 1/365th of the net asset value of the Trust 
multiplied by 0.40%).
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    Gold Shares are not individually redeemable, and Authorized 
Participants that wish to redeem a Basket (i.e., 50,000 Gold Shares) 
will receive the Basket Gold Amount in exchange for each Basket 
surrendered. Upon the surrender of the Gold Shares and payment of the 
applicable Trustee's fee and any expenses, taxes or charges, the BNY 
will deliver to the redeeming Authorized Participant the amount of gold 
corresponding to the redeemed Baskets. Unless otherwise requested by 
the Authorized Participants, gold will then be delivered to the 
redeeming Authorized Participants in the form of physical bars 
only.\26\ Thus, although Authorized Participants place orders to 
purchase or redeem Gold Shares throughout the trading day, the actual 
Basket Gold Amount is determined at 4 p.m. or shortly thereafter.
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    \26\ If the amount of gold corresponding to the Basket Gold 
Amount results in an amount that is less than a full gold bar 
denomination, the Authorized Participant has the ability to take 
and/or deliver fractional gold bar amounts. Telephone conversation 
between Jeffrey Burns, Associate General Counsel, Amex, and Florence 
Harmon, Senior Special Counsel, Division of Market Regulation, 
Commission, on December 3, 2004.
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    The Bank of Nova Scotia (``BNS'') will be the custodian for the 
Trust and responsible for safekeeping the gold.\27\ Gold deposited with 
BNS must either (a) meet the requirements to be delivered in settlement 
of a COMEX gold futures contract pursuant to the rules adopted by the 
COMEX or (b) meet the specifications for weight, dimensions, fineness 
(or purity), identifying marks and appearance of gold bars as set forth 
in ``The Good Delivery Rules for Gold and Silver Bars'' published by 
the LBMA.
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    \27\ If the total value of the Trust's gold held by the 
custodian exceeds $2 billion, then the custodian will be under no 
obligation to accept additional gold deliveries. In such a case, the 
Trustee will retain an additional custodian.
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    Shortly after 4 p.m. each business day, the BNY will determine the 
NAV for the Trust. The BNY will calculate the NAV by multiplying the 
fine ounces of gold held by the Trust (after gold has been sold for 
that day to pay that day's fees and expenses) by the daily settlement 
value of the COMEX spot month gold futures contract.\28\ At any point 
in time, the spot month contract is the futures contract then closest 
to maturity. If a COMEX settlement price for a spot month gold futures 
contract is not announced, the Trustee will use the most recently 
announced spot month COMEX settlement price, unless the Trustee (BNY), 
in consultation with the Sponsor (Barclays), determines that such price 
is inappropriate. Once the value of the gold is determined, the BNY 
will then subtract all accrued fees (other than the fees to be computed 
by reference to the value of the Trust or its assets), expenses and 
other liabilities of the Trust from the total value of gold and all 
other assets of the Trust. This adjusted NAV is then used to compute 
all fees (including the Trustee and Sponsor fees) that are calculated 
from the value of Trust assets. To determine the NAV, the BNY will 
subtract from the adjusted NAV the amount of accrued fees from the 
value of Trust assets. The BNY will calculate the NAV per share by 
dividing the NAV by the number of Gold Shares outstanding.
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    \28\ As previously stated, the COMEX daily settlement price for 
each gold futures contract is established by a subcommittee of COMEX 
members shortly after the close of trading in New York. The daily 
settlement price for each contract (delivery month) is derived from 
the daily settlement price for the most active futures contract 
month that is not necessarily the spot month. This settlement price 
is the average of the highest and lowest priced trades reported 
during the last one (1) minute of trading during regular trading 
hours. For all other gold futures contract months (which may include 
the spot month), the settlement prices are determined by COMEX based 
upon differentials reflected in spread trades between adjacent 
months, such differentials being directly or indirectly related to 
the most active month. These differentials are the average of the 
highest and lowest spread trades (trades based upon the differential 
between the prices for two contract months) reported during the last 
fifteen (15) minutes of trading during regular trading hours. In the 
case that there were no such spread trades, the average of the bids 
and offers for spread transactions during that last fifteen (15) 
minute period are used. In the case where there are no bids and 
offers during that time, the contracts are settled at prices 
consistent with the differentials for other contract months that 
were settled by the first or second method. If the third method is 
used, the subcommittee of the COMEX members establishing those 
settlement prices provides a record of the differentials from other 
contract months that formed the basis for those settlements.

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[[Page 3753]]

3. Availability of Information Regarding Gold Shares
    The Web site for the Trust at http://www.ishares.com, which will be 
publicly accessible at no charge, will contain the following 
information about Gold Shares: (a) The prior business day's NAV, Basket 
Gold Amount, and reported closing price, and the present day's 
Indicative Basket Gold Amount; (b) the mid-point of the bid-ask price 
\29\ in relation to the NAV as of the time the NAV is calculated (the 
``Bid-Ask Price''); (c) calculation of the premium or discount of such 
price against such NAV; (d) data in chart form displaying the frequency 
distribution of discounts and premiums of the Bid-Ask Price against the 
NAV, within appropriate ranges for each of the four (4) previous 
calendar quarters; (e) the Prospectus; and (f) other applicable 
quantitative information, such as expense ratios, trading volumes, and 
the total return of the Gold Shares.\30\ The Exchange will provide a 
hyperlink on its Web site at http://www.amex.com to the Trust's Web 
site at http://www.ishares.com.
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    \29\ The bid-ask price of Shares is determined using the highest 
bid and lowest offer as of the time of calculation of the NAV.
    \30\ Telephone conversation between Jeffrey Burns, Associate 
General Counsel, Amex, and Florence Harmon, Senior Special Counsel, 
Division of Market Regulation, Commission, on January 18, 2005 (as 
to examples of ``other quantitative information'').
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    The Exchange will also make available on its Web site daily trading 
volume, closing prices, and the NAV from the previous day of the Gold 
Shares. Amex will also disseminate during regular Amex trading hours 
from 9:30 a.m. to 4:15 p.m. New York time, through the facilities of 
the CTA, the last sale price for Gold Shares on a real-time basis.\31\ 
Amex will disseminate each day the prior day's NAV and shares 
outstanding through the facilities of the CTA. In addition, Amex will 
disseminate the Indicative Trust Value on a per Gold Share basis every 
15 seconds through the Consolidated Tape during regular Amex trading 
hours of 9:30 a.m. to 4:15 p.m. New York time.\32\ Shortly after 4 p.m. 
each business day, the BNY, Amex, and Barclays (Sponsor) will 
disseminate the NAV for the Gold Shares, the Basket Gold Amount (for 
orders placed during the day), and the Indicative Basket Gold Amount 
(for use by Authorized Participants contemplating placing orders the 
following business day). The Basket Gold Amount, the Indicative Basket 
Gold Amount, and the NAV are communicated by the BNY to all Authorized 
Participants via facsimile or electronic mail message and will be 
available on the Trust's Web site at http://www.ishares.com.
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    \31\ Telephone conversation between Jeffrey Burns, Associate 
General Counsel, Amex, and Florence Harmon, Senior Special Counsel, 
Division of Market Regulation, Commission, on January 18, 2005 (as 
to real-time dissemination of last sale price).
    \32\ The Indicative Trust Value will be calculated based on the 
amount of gold required for creations and redemptions on that day 
(e.g., Indicative Basket Gold Amount) and a price of gold derived 
from the most recently reported trade price in the active gold 
futures contract. The prices reported for the active contract month 
will be adjusted based on the prior day's spread differential 
between settlement values for that contract and the spot month 
contract. In the event that the spot month contract is also the 
active contract, the last sale price for the active contract will 
not be adjusted.
    The Indicative Trust Value will not reflect changes to the price 
of gold between the close of trading at the COMEX, typically 1:30 
p.m. New York time, and the open of trading on the NYMEX ACCESS 
market at 2 p.m. New York time. While the market for the gold 
futures is open for trading, the Indicative Trust Value can be 
expected to closely approximate the value per share of the 
Indicative Basket Gold Amount. The Indicative Trust Value on a per 
Gold Share basis disseminated during Amex trading hours should not 
be viewed as a real time update of the NAV, which is calculated only 
once a day.
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4. Information About Underlying Gold Holdings
    There is a considerable amount of gold price and gold market 
information available on public Web sites and through professional and 
subscription services. In most instances, real-time information is only 
available for a fee, and information available free of charge is 
subject to delay (typically 20 minutes). The Exchange states that 
investors may obtain on a 24-hour basis gold pricing information based 
on the spot price for a troy ounce of gold from various financial 
information service providers, such as Reuters and Bloomberg. Reuters 
and Bloomberg provide at no charge on their Web sites delayed 
information regarding the spot price of gold and last sale prices of 
gold futures, as well as information about news and developments in the 
gold market. Reuters and Bloomberg also offer a professional service to 
subscribers for a fee that provides information on gold prices directly 
from market participants. In addition, an organization named EBS 
provides an electronic trading platform to institutions such as bullion 
banks and dealers for the trading of spot gold, as well as a feed of 
live streaming prices to Reuters and Moneyline Telerate subscribers.
    As previously stated, the Exchange states that complete real-time 
data for gold futures and options prices traded on the COMEX is 
available by subscription from Reuters and Bloomberg. The closing price 
and settlement prices of the COMEX gold futures contracts are publicly 
available from the NYMEX at http://www.nymex.com, automated quotation 
systems, published or other public sources, or on-line information 
services such as Bloomberg or Reuters. The NYMEX also provides delayed 
futures and options information on current and past trading sessions 
and market news free of charge on its Web site.

E. Criteria for Initial Share Issuance and Continued Listing

    The Trust will be subject to the criteria in Rules 1201A and 1202A 
for initial and continued listing of Gold Shares. The initial listing 
standards provide for a minimum number of shares to be outstanding at 
the time of commencement of trading on the Exchange. The continued 
listing criteria provides for the delisting or removal from listing of 
the Gold Shares under any of the following circumstances:
     Following the initial twelve month period from the date of 
commencement of trading of the Gold Shares: (i) If the Trust has more 
than 60 days remaining until termination and there are fewer than 50 
record and/or beneficial holders of the Gold Shares for 30 or more 
consecutive trading days; (ii) if the Trust has fewer than 50,000 Gold 
Shares issued and outstanding; or (iii) if the market value of all Gold 
Shares is less than $1,000,000.
     If the value of the underlying gold is no longer 
calculated or available on at least a 15-second delayed basis from a 
source unaffiliated with the sponsor, trust, custodian or the Exchange, 
or the Exchange stops providing a hyperlink on its Web site to any such 
unaffiliated gold value.
     The Indicative Trust Value is no longer made available on 
at least a 15-second delayed basis.
     If such other event shall occur or condition exists which 
in the opinion of the Exchange makes further dealings on the Exchange 
inadvisable.

F. Original and Annual Listing Fees

    The Amex original listing fee applicable to the listing of the Gold 
Trust is $5,000. In addition, the annual listing fee applicable under 
Section 141 of the Amex Company Guide will be based upon the year-end 
aggregate number of shares in all series of the Gold Trust outstanding 
at the end of each calendar year and range from $15,000 to $30,000 per 
year.

G. Exchange Trading Rules and Policies

    Under Amex Rules 1200A et seq., Commodity-Based Trust Shares are

[[Page 3754]]

generally subject to the Amex trading rules applicable to equity 
securities, including, among others, rules governing priority, parity 
and precedence of orders, specialist responsibilities, account opening, 
and customer suitability (Amex Rule 411).
    Initial equity margin requirements of 50% will apply to 
transactions in Gold Shares. Gold Shares will trade on the Amex until 
4:15 p.m. New York time each business day and will trade in a minimum 
price variation of $0.01 pursuant to Amex Rule 127. Trading rules 
pertaining to odd-lot trading in Amex equities (Amex Rule 205) will 
also apply.
    Amex Rule 154, Commentary .04(c) provides that stop and stop limit 
orders to buy or sell a security (other than an option, which is 
covered by Rule 950(f) and Commentary thereto) the price of which is 
derivatively priced based upon another security or index of securities, 
may with the prior approval of a Floor Official, be elected by a 
quotation, as set forth in Commentary .04(c)(i-v). The Exchange has 
designated Gold Shares as eligible for this treatment.\33\
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    \33\ See Securities Exchange Act Release No. 29063 (April 10, 
1991), 56 FR 15652 (April 17, 1991) at note 9, regarding the 
Exchange's designation of equity derivative securities as eligible 
for such treatment under Amex Rule 154, Commentary .04(c).
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    Gold Shares will be deemed ``Eligible Securities,'' as defined in 
Amex Rule 230, for purposes of the Intermarket Trading System Plan and 
therefore will be subject to the trade through provisions of Amex Rule 
236, which require that Amex members avoid initiating trade-throughs 
for ITS securities.
    Specialist transactions of Gold Shares made in connection with the 
creation and redemption of Gold Shares will not be subject to the 
prohibitions of Amex Rule 190.\34\ Unless exemptive or no-action relief 
is available, Gold Shares will be subject to the short sale 
requirements of Rule 10a-1 and Regulation SHO under the Act.\35\ If 
exemptive or no-action relief is provided, the Exchange will issue a 
notice detailing the terms of the exemption or relief.
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    \34\ See Commentary .05 to Amex Rule 190.
    \35\ The Gold Trust has requested exemptive relief in connection 
with the trading of Gold Shares from the operation of certain short 
sale requirements of Rule 10a-1 and may seek no-action relief from 
Rule 200(g) of Regulation SHO under the Act. See 17 CFR 240.10a-1; 
17 CFR 242.200(g). The requested relief is currently pending with 
the Commission staff in the Division of Market Regulation. If 
granted, Gold Shares would be exempt from Rule 10a-1, permitting 
sales without regard to the ``tick'' requirements of Rule 10a-1. 
Rule 10a-1(a)(1)(i) provides that a short sale of an exchange-traded 
security may not be effected (i) below the last regular-way sale 
price (an ``uptick'') or (ii) at such price unless such price is 
above the next preceding different price at which a sale was 
reported (a ``zero-plus tick''). No-action relief from the marking 
requirements of Rule 200(g) of Regulation SHO would permit broker-
dealers, subject to certain conditions, to mark short sales in the 
Gold Shares ``short,'' rather than ``short exempt.''
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    The Exchange represents that the Gold Shares will generally be 
subject to the Exchange's stabilization rule, Amex Rule 170, except 
that specialists may buy on ``plus ticks'' and sell on ``minus ticks,'' 
in order to bring the Gold Shares into parity with the underlying gold 
and/or futures price. Proposed Commentary .01 to proposed Amex Rule 
1203A sets forth this limited exception to Amex Rule 170.
    Amex states that the adoption of Amex Rule 1203A relating to 
certain specialist prohibitions will address potential conflicts of 
interest in connection with acting as a specialist in the Gold Shares. 
Specifically, Amex Rule 1203A provides that the prohibitions in Amex 
Rule 175(c) apply to a specialist in the Gold Shares so that the 
specialist or affiliated person may not act or function as a market 
maker in the underlying gold, related gold futures contract or option, 
or any other related gold derivative. An affiliated person of the 
specialist consistent with Amex Rule 193 (Affiliated Persons of 
Specialists) may be afforded an exemption to act in a market making 
capacity, other than as a specialist in the Gold Shares on another 
market center, in the underlying gold, related gold futures, options on 
futures, or any other related gold derivative. In particular, proposed 
Rule 1203A provides that an approved person of an equity specialist 
that has established and obtained Exchange approval for procedures 
restricting the flow of material, non-public market information between 
itself and the specialist member organization, and any member, officer, 
or employee associated therewith, may act in a market making capacity, 
other than as a specialist in the Gold Shares on another market center, 
in the underlying commodity, related commodity futures or options on 
commodity futures, or any other related commodity derivatives.

H. Surveillance

    Amex represents that its surveillance procedures applicable to 
trading of Gold Shares are adequate to deter manipulation, will be 
similar to those applicable to other trust issued receipts and 
exchange-traded fund shares (``ETFs''), and will incorporate and rely 
upon existing Amex surveillance procedures governing options and 
equities. The Exchange currently has in place an Information Sharing 
Agreement with the NYMEX for the purpose of providing information in 
connection with trading in or related to COMEX gold futures contracts.
    Also, the Exchange states that adoption of Rule 1204A will 
facilitate surveillance of the specialist handling Gold Shares. Amex 
Rule 1204A requires that the specialist handling the Gold Shares to 
provide the Exchange with information relating to its trading in 
physical gold, gold futures contracts, options on gold futures, or any 
other gold derivative. Amex Rule 1204A also prohibits the specialist in 
the Gold Shares from using any material nonpublic information received 
from any person associated with a member or employee of such person 
regarding trading by such person or employee in physical gold, gold 
futures contracts, options on gold futures, or any other gold 
derivatives (including the Gold Shares).
    As a general matter, the Exchange has regulatory jurisdiction over 
its members, member organizations, and approved persons of a member 
organization. The Exchange also has regulatory jurisdiction over any 
person or entity controlling a member organization, as well as a 
subsidiary or affiliate of a member organization that is in the 
securities business. A subsidiary or affiliate of a member organization 
that does business only in commodities would not be subject to Exchange 
jurisdiction, but the Exchange could obtain information regarding the 
activities of such subsidiary or affiliate through surveillance sharing 
agreements with regulatory organizations of which such subsidiary or 
affiliate is a member.

I. Information Circular

    The Amex will distribute an information circular (``Information 
Circular'') to its members in connection with the trading of Gold 
Shares. The Information Circular will discuss the special 
characteristics and risks of trading this type of security. 
Specifically, the Information Circular, among other things, will 
discuss what the Gold Shares are, how a basket is created and redeemed, 
the requirement that members and member firms deliver a prospectus to 
investors purchasing the Gold Shares prior to or concurrently with the 
confirmation of a transaction, applicable Amex rules, dissemination 
information regarding the per share Indicative Trust Value, trading 
information, and applicable suitability rules. The Information Circular 
will also explain that the Gold Trust is subject to various fees and 
expenses described in

[[Page 3755]]

the Registration Statement and that the number of ounces of gold 
required to create a basket or to be delivered upon a redemption of a 
basket will gradually decrease over time because the Gold Shares 
comprising a basket will represent a decreasing amount of gold due to 
the sale of the Gold Trust's gold to pay Trust expenses. The 
Information Circular will also reference the fact that there is no 
regulated source of last sale information regarding physical gold and 
that the Commission has no jurisdiction over the trading of gold as a 
physical commodity.
    The Information Circular will also notify members and member 
organizations about the procedures for purchases and redemptions of 
Gold Shares in baskets and that Gold Shares are not individually 
redeemable but are redeemable only in basket-size aggregations or 
multiples thereof. The Information Circular will advise members of 
their suitability obligations with respect to recommended transactions 
to customers in the Gold Shares and inform them of Amex rules regarding 
trading halts applicable to Gold Shares. The Information Circular will 
also discuss any relief, if granted, by the Commission or the staff 
from any rules under the Act.
    The Information Circular will disclose that the NAV for Gold Shares 
will be disseminated shortly after 4 p.m. each trading day based on the 
COMEX daily settlement value, which is disseminated shortly after 1:30 
p.m. New York time each trading day.

J. Suitability

    As stated, the Information Circular will inform members and member 
organizations of the characteristics of the Gold Trust and of 
applicable Exchange rules, as well as of the requirements of Amex Rule 
411 (Duty to Know and Approve Customers).
    The Exchange notes that pursuant to Rule 411, members and member 
organizations are required in connection with recommending transactions 
in the Gold Shares to have a reasonable basis to believe that a 
customer is suitable for the particular investment given reasonable 
inquiry concerning the customer's investment objectives, financial 
situation, needs, and any other information known by such member.

K. Trading Halts

    Amex Rule 117 sets forth the trading halt parameters, i.e., 
``circuit breakers,'' applicable to the Gold Shares during periods of 
extraordinary volatility. In addition to the parameters set forth in 
Rule 117, the Exchange will halt trading in Gold Shares if trading in 
the underlying COMEX gold futures contract is halted or suspended. 
Third, with respect to a halt in trading that is not specified above, 
the Exchange may also consider other relevant factors and the existence 
of unusual conditions or circumstances that may be detrimental to the 
maintenance of a fair and orderly market.

III. Discussion

    After careful consideration, the Commission finds that the proposed 
rule change, as amended, is consistent with the Act \36\ and the rules 
and regulations thereunder applicable to a national securities 
exchange.\37\
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    \36\ 36 15 U.S.C. 78f(b).
    \37\ In approving this proposal, the Commission has considered 
its impact on efficiency, competition, and capital formation. 15 
U.S.C. 78c(f).
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A. Surveillance

    Information sharing agreements with markets trading securities 
underlying a derivative product are an important part of a self-
regulatory organization's ability to monitor for trading abuses in 
derivative products. Although an information sharing agreement with the 
OTC gold market is not possible, the Commission believes that the 
unique liquidity and depth of the gold market, together with Amex's 
information sharing agreement with NYMEX (of which COMEX is a division) 
and Exchange Rules 1203A and 1204A, create the basis for Amex to 
monitor for fraudulent and manipulative practices in the trading of the 
Gold Shares.\38\
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    \38\ The Commission notes that it recently reached a similar 
conclusion with respect to a proposal by the New York Stock Exchange 
to list and trade trust shares that, as in the Amex proposal, 
correspond to a fixed amount of gold. See Securities Exchange Act 
Release No. 50603 (October 28, 2004), 69 FR 64614 (November 5, 
2004). In that recent order, the Commission noted that it had 
previously approved the listing and trading of foreign currency 
options, for which there is no self-regulatory organization or 
Commission surveillance of the underlying markets, on the basis that 
the magnitude of the underlying currency market militated against 
manipulations through inter-market trading activity. See id., at 
64619 (Securities Exchange Act Release Nos. 19133 (October 14, 1982) 
(approving the listing of standardized options on foreign currencies 
); 36505 (November 22, 1995) (approving the listing of dollar-
denominated delivery foreign currency options on the Japanese Yen); 
and 36165 (August 29, 1995) (approving listing standards for, among 
other things, currency and currency index warrants).
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    The OTC market for gold is extremely deep and liquid. The LBMA 
estimates that the monthly average daily volume figures published by 
the LBMA for 2003 range from a high of 19 million to a low of 13.6 
million troy ounces per day.\39\ In addition, COMEX figures for 2003 
indicate that the average daily volume for gold futures contracts was 
4.9 million ounces per day.\40\
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    \39\ There are no authoritative published figures for overall 
worldwide volume in gold trading. The LBMA publishes statistics 
compiled from the six members offering clearing services. 
Information regarding clearing volume estimates by the LBMA can be 
found at http://www.lbma.org.uk/clearing_table.htm.
    \40\ Information regarding average daily volume estimates by the 
COMEX (a division of NYMEX) can be found at http://www.nymex.com/jsp/markets/md_annual_volume6.jsp#2. The statistics are based on 
gold futures contracts, each of which relates to 100 ounces of gold.
---------------------------------------------------------------------------

    Finally, Amex Rule 1204A will require that the specialist handling 
the Gold Shares provide the Exchange with information relating to its 
trading in physical gold, gold futures contracts, options on gold 
futures, or any other gold derivative. The Commission believes these 
reporting and record-keeping requirements will assist the Exchange in 
identifying situations potentially susceptible to manipulation. Amex 
Rule 1204A will also prohibit the specialist in the Gold Shares from 
using any material nonpublic information received from any person 
associated with a member or employee of such person regarding trading 
by such person or employee in physical gold, gold futures contracts, 
options on gold futures, or any other gold derivatives (including the 
Gold Shares). In addition, Amex Rule 1203A will prohibit the specialist 
in the Gold Shares from being affiliated with a market maker in 
physical gold, gold futures, or options on gold futures unless adequate 
information barriers are in place and approved by the Exchange.

B. Dissemination of Information About the Gold Shares

    The Commission finds that sufficient venues for obtaining reliable 
gold price information exist so that investors in the Gold Shares can 
adequately monitor the underlying spot market in gold relative to the 
NAV of their Gold Shares. As discussed more fully above, the Commission 
notes that there is a considerable amount of gold price and gold market 
information available 24 hours per day on public Web sites and through 
professional and subscription services. In addition, the Trustee will 
disseminate each day on the Trust Web site, an estimated amount 
representing the Basket Gold Amount. The Exchange will also disseminate 
through the CTA the Indicative Trust Value on a per share basis every 
15 seconds during regular Amex trading hours of 9:30 a.m. to 4:15 p.m. 
New York time (except between 1:30 p.m. and 2 p.m., the time period 
from the close of regular trading of the COMEX gold futures contract 
and the start of trading of COMEX gold futures contracts on NYMEX 
ACCESS).

[[Page 3756]]

The last sale price for Gold Shares will also be disseminated on a 
real-time basis over the Consolidated Tape.
    The Commission also notes that the Trust's Web site at http://www.ishares.com is and will be publicly accessible at no charge and 
will contain the NAV of the Gold Shares and the Basket Gold Amount as 
of the prior business day, the Bid-Ask Price, and a calculation of the 
premium or discount of the Bid-Ask Price in relation to the closing 
NAV. Additionally, the Trust's Web site, to which the Amex will link, 
will also provide data in chart form displaying the frequency 
distribution of discounts and premiums of the Bid-Ask Price against the 
NAV, within appropriate ranges for each of the four previous calendar 
quarters, the Prospectus, and other applicable quantitative 
information. The Commission believes that dissemination of this 
information will facilitate transparency with respect to the Gold 
Shares and diminish the risk of manipulation or unfair informational 
advantage.

C. Listing and Trading

    Further, the Commission finds that the Exchange's proposed rules 
and procedures for the listing and trading of the proposed Gold Shares 
are consistent with the Act. For example, Gold Shares will be subject 
to Amex rules governing trading halts, responsibilities of the 
specialist, and customer suitability requirements. In addition, the 
Gold Shares will be subject to Amex Rules 1201A and 1202A for initial 
and continued listing of Gold Shares.
    The Commission believes that listing and delisting criteria for the 
Gold Shares should help to maintain a minimum level of liquidity and 
therefore minimize the potential for manipulation of the Gold Shares. 
Finally, the Commission believes that the Exchange's Information 
Circular adequately will inform members and member organizations about 
the terms, characteristics, and risks in trading the Gold Shares.

IV. Amendment No. 5

    The Amex has requested that the Commission grant accelerated 
approval to Amendment No. 5 to the proposed rule change.\41\ The 
Commission believes that the amendments proposed in Amendment No. 5 
regarding the requirement for separate rule filings under Section 
19(b)(2) of the Act for Commodity-Based Trust Shares, certain fees and 
expenses, and other minor changes to the proposal, provide clarity and 
additional detail, but do not change the substance of the proposal. 
Because the amendment clarifies and makes other minor changes to the 
proposal, the Commission therefore finds good cause, consistent with 
Section 19(b)(2) of the Act,\42\ to approve Amendment No. 5 to the 
proposed rule change prior to the thirtieth day after the date of 
publication of notice of filing thereof in the Federal Register.
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    \41\ See Amendments Nos. 1 and 2, supra notes 4 and 5.
    \42\ 15 U.S.C. 78s(b)(2).
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    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether Amendment No. 5 
is consistent with the Act. Comments may be submitted by any of the 
following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to [email protected]. Please include 
File Number SR-Amex-2004-38 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., 
Washington, DC 20549-0609.
    All submissions should refer to File Number SR-Amex-2004-38. This 
file number should be included on the subject line if e-mail is used. 
To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). 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 Section, 450 Fifth 
Street, NW., Washington, DC 20549. Copies of such filing also will be 
available on Amex's Web site (http://www.amex.com) and for inspection 
and copying at the Amex's Office of the Secretary. All comments 
received will be posted without change; the Commission does not edit 
personal identifying information from submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-Amex-2004-38 and should be 
submitted on or before February 16, 2005.

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\43\ that the proposed rule change (SR-Amex-2004-38), as amended, 
is hereby approved.
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    \43\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\44\
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    \44\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
 [FR Doc. E5-283 Filed 1-25-05; 8:45 am]
BILLING CODE 8010-01-P