[Federal Register Volume 70, Number 222 (Friday, November 18, 2005)]
[Notices]
[Pages 70010-70014]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-6375]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52761; File No. SR-NYSE-2005-76]


Self-Regulatory Organizations; New York Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
Relating to iShares[supreg] Index Funds of iShares Trust and iShares, 
Inc.

November 10, 2005.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on October 28, 2005, the New York Stock Exchange, Inc. (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the NYSE. The Exchange 
filed the proposed rule change as a ``non-controversial'' rule change 
under Rule 19b-4(f)(6) under the Act,\3\ which renders the proposal 
effective upon filing with the Commission. The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The NYSE proposes to list and trade the following iShares[supreg] 
Index Funds, which are Investment Company Units (``ICUs'') under 
section 703.16 of the Exchange Listed Company Manual: iShares 
MSCISM Brazil Index Fund, iShares MSCI Hong Kong Index Fund, 
iShares MSCI Japan Index Fund, iShares MSCI Malaysia Index Fund, 
iShares MSCI Singapore Index Fund, iShares MSCI South Korea Index Fund, 
iShares MSCI Taiwan Index Fund, iShares MSCI United Kingdom Index Fund, 
and iShares S&P Europe 350 Index Fund.\4\
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    \4\ MSCI and MSCI Indices are registered service marks of Morgan 
Stanley & Co., Incorporated.
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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 NYSE included statements 
concerning the purpose of, and basis for, the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The NYSE has prepared summaries, set forth in sections 
A, B, and C below, of the most significant aspects of such statements.

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

1. Purpose
    The NYSE notes that it has adopted listing standards applicable to 
ICUs, which are consistent with the listing criteria currently used by 
other exchanges, and trading standards pursuant to which the Exchange 
may trade ICUs on the Exchange, including on an unlisted trading 
privileges (``UTP'') basis.\5\ The Exchange now proposes to list the 
following iShares Index Funds (``Funds''), which are ICUs, under 
section 703.16 of the Exchange

[[Page 70011]]

Listed Company Manual (``Manual''): iShares MSCI Brazil Index Fund, 
iShares MSCI Hong Kong Index Fund, iShares MSCI Japan Index Fund, 
iShares MSCI Malaysia Index Fund, iShares MSCI Singapore Index Fund, 
iShares MSCI South Korea Index Fund, iShares MSCI Taiwan Index Fund, 
iShares MSCI United Kingdom Index Fund, and iShares S&P Europe 350 
Index Fund.
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    \5\ In 1996, the Commission approved section 703.16 of the 
Listed Company 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 (SR-NYSE-95-23). 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 Listed Company Manual and 
Exchange Rule 1100. See Securities Exchange Act Release No. 43679, 
December 5, 2000; 65 FR 77949, December 13, 2000 (SR-NYSE-00-46).
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    The Funds are currently listed and traded on the American Stock 
Exchange LLC (``Amex'') \6\ and the issuer intends to move listing of 
the Funds to the NYSE. The Funds also trade on the NYSE \7\ on a UTP 
basis and other securities exchanges \8\ and in the over-the-counter 
market.\9\
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    \6\ The Funds (with the exception of the S&P Europe 350 Fund) 
were formerly known as World Equity Benchmark Shares or WEBS, and an 
initial series of WEBS, including the Funds that are the subject of 
the instant filing were initially 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 (SR-Amex-95-43). The 
iShares S&P Europe 350 Fund was approved for listing and trading on 
the Amex in Securities Exchange Act Release No. 34-42786, May 15, 
2000; 65 FR 33586, May 24, 2000 (SR-Amex-99-49). Collectively these 
Commission orders are subsequently referred to as the ``Amex Listing 
Orders.''
    \7\ The Commission has previously approved trading on the 
Exchange on a UTP basis of the iShares MSCI Japan Index Fund. See 
Securities Exchange Act Release No. 46298, August 1, 2002; 67 FR 
51614, August 8, 2002; (SR-NYSE-2002-27). The Commission also has 
approved trading on the Exchange of the following iShares Funds on a 
UTP basis: iShares MSCI EAFE; iShares S&P Europe 350; iShares MSCI 
Taiwan; iShares MSCI Pacific ex-Japan; iShares MSCI Brazil; iShares 
MSCI United Kingdom; iShares MSCI South Korea; iShares MSCI 
Singapore; iShares MSCI Germany; iShares MSCI Australia; iShares 
MSCI Mexico; iShares MSCI Hong Kong; iShares MSCI South Africa; 
iShares MSCI Emerging Markets Free; and iShares MSCI Malaysia. See 
Securities Exchange Act Release No. 50142, August 3, 2004; 69 FR 
48539, August 10, 2004; (SR-NYSE-2004-27). Except as noted below, 
information relating to the Funds and the indexes underlying the 
Funds as described in SR-NYSE-2002-27 and SR-NYSE-2004-27 is 
incorporated by reference herein. Barclays Global Fund Advisors, 
Inc., the investment advisor for each Fund (``BGFA'' or the 
``Advisor''), has represented to the Exchange that, except for the 
information referenced herein, the information included in the 
prospectuses and Statements of Additional Information upon which 
information in SR-NYSE-2002-27 and SR-NYSE-2004-27 was based has not 
materially changed since Commission approval of those filings. 
Telephone conversation by and between Michou Nguyen, Attorney, 
Division of Market Regulation (``Division''), Commission, and John 
Carey, Assistant General Counsel, NYSE, on November 1, 2005. 
Collectively, these Commission orders are subsequently referred to 
as the ``NYSE UTP Orders.''
    \8\ See e.g., Securities Exchange Act Release No. 39117, 
September 22, 1997; 62 FR 50973, September 29, 1997 (SR-CHX-96-14) 
(approving the UTP trading of WEBS).
    \9\ Additional information regarding the Funds (except for the 
S&P Europe 350 Index Fund) is included in the Prospectus of iShares, 
Inc., dated January 1, 2005, as revised September 23, 2005, and 
Statement of Additional Information (``SAI'') of iShares, Inc., 
dated January 1, 2005, as revised September 23, 2005. For iShares 
S&P Europe 350 Index Fund, additional information is included in the 
Prospectus of iShares Trust, dated August 1, 2005, as revised 
September 12, 2005, and SAI of iShares Trust, dated August 24, 2005, 
as revised September 12, 2005. Additional Information for the Funds 
is available on the iShares Web site (http://www.iShares.com). Fund 
information relating to NAV, returns, dividends, component stock 
holdings and other information is updated on a daily basis on the 
iShares Web site.
    While the Advisor would manage the Funds, the Funds' Board of 
Directors would have overall responsibility for the Funds' 
operations. The composition of the Board is, and would be, in 
compliance with the requirements of section 10 of the Investment 
Company Act of 1940 (``1940 Act''). The Funds are subject to and 
must comply with section 303A.06 of the Manual, which requires that 
the Funds have an audit committee that complies with SEC Rule 10A-3.
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    The shares of the Funds are issued by iShares, Inc. and, for 
iShares S&P Europe 350 Index Fund, iShares Trust, which are open-ended 
management investment companies. Barclays Global Fund Advisors 
(``BGFA''), a subsidiary of Barclays Global Investors, N.A. (``BGI''), 
is the investment advisor (``Advisor'') for each Fund. BGI is a wholly 
owned indirect subsidiary of Barclays Bank PLC of the United Kingdom. 
BGFA and its affiliates are not affiliated with the index providers 
(MSCI and S&P). Investors Bank and Trust Company serves as 
administrator, custodian and transfer agent for the Funds and SEI 
Investments Distribution Co. is distributor for the Funds. The 
distributor is not affiliated with the NYSE or BGFA.
    The number of shares of each Fund outstanding as of September 15, 
2005 ranged from approximately 15 million shares (iShares S&P Europe 
350) to approximately 698 million shares (iShares MSCI Japan). The NYSE 
notes that these numbers far exceed the minimum number of shares to be 
issued in connection with initial listing of the Funds on the Amex in 
1996 and in 2000.\10\ A minimum of two Creation Units of each MSCI Fund 
(ranging from 40,000 to 200,000 shares per Creation Unit) were required 
to be outstanding at the time of listing on the Amex, with the 
exception of iShares MSCI Japan Index Fund, for which one Creation Unit 
(600,000 shares) was required to be outstanding.
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    \10\ See Securities Exchange Act Release No. 36947, March 8, 
1996, 61 FR 10606, March 14, 1996 (SR-Amex-95-43); Securities 
Exchange Act Release No. 42786, May 15, 2000, 65 FR 33586, May 24, 
2000 (SR-Amex-99-49).
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    The NYSE notes that these number of shares outstanding also far 
exceed the 100,000 minimum number of shares required to be outstanding 
in connection with listing of ICUs under Rule 19b-4(e) \11\ under the 
Act \12\ pursuant to the Exchange's generic listing standards in 
Section 703.16 of the Manual. In addition, the Exchange has required a 
minimum number of 100,000 shares of ICUs to be outstanding in 
connection with initial listing of iShares FTSE/Xinhua China 25 Index 
Fund, which the Commission noted is comparable to requirements 
previously applied to listed series of ICUs.\13\ The operation of the 
Funds, specifically, the creation and redemption process, is described 
in more detail in the prior Amex Listing Orders and the NYSE UTP Orders 
and has not materially changed.\14\
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    \11\ 17 CFR 240.19b-4(e).
    \12\ U.S.C. 78a.
    \13\ See note 51 of Securities Exchange Act Release No. 50505, 
October 8, 2004; 69 FR 61280, October 15, 2004; (SR-NYSE-2004-55).
    \14\ Electronic mail exchange by and between Florence Harmon, 
Senior Special Counsel, Division, John Carey, Assistant General 
Counsel, NYSE, on November 9, 2005.
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Correlation

    According to the Funds' prospectus, BGFA expects that over time, 
the correlation between each Fund's performance and that of its 
underlying index, before fees and expenses, will be 95% or better. A 
figure of 100% would indicate perfect correlation. Any correlation of 
less than 100% is called ``tracking error.'' A Fund using a 
representative sampling strategy (which all of the Funds utilize) can 
be expected to have a greater tracking error than a Fund using a 
replication strategy. Replication is a strategy in which a Fund invests 
in substantially all of the securities in its underlying index in 
approximately the same proportions as in the underlying index.
    The Funds have chosen to pursue a representative sampling strategy 
which, by its very nature, entails some risk of tracking error. (It 
should also be noted that Fund expenses, the timing of cash flows, and 
other factors all contribute to tracking error.) The Web site for the 
Funds, http://www.iShares.com, contains detailed information on the 
performance and the tracking error for each Fund.\15\
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    \15\ The price at which the Funds' shares trade should be 
disciplined by arbitrage opportunities created by the ability to 
purchase or redeem shares of the Funds in Creation Unit Aggregations 
throughout the trading day. This should help ensure that the Funds' 
shares will not trade at a material discount or premium to their net 
asset value or redemption value.
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Industry Concentration Policy

    As disclosed in the applicable Fund prospectus, each of the iShares 
MSCI Singapore Index and iShares MSCI South Korea Index Funds has the

[[Page 70012]]

following concentration policy: with respect to the two most heavily 
weighted industries or groups of industries in its underlying index, 
the Fund will invest in securities (consistent with its investment 
objective and other investment policies) so that the weighting of each 
such industry or group of industries in the Fund does not diverge by 
more than 10% from the respective weighting of such industry or group 
of industries in its underlying index. An exception to this policy is 
that if investment in the stock of a single issuer would account for 
more than 25% of the Fund, the Fund will invest less than 25% of its 
net assets in such stock and will reallocate the excess to stock(s) in 
the same industry or group of industries, and/or to stock(s) in another 
industry or group of industries, in its underlying index. Each Fund 
will evaluate these industry weightings at least weekly, and at the 
time of evaluation will adjust its portfolio composition to the extent 
necessary to maintain compliance with the above policy.
    Each of the iShares MSCI Brazil Index, iShares MSCI Hong Kong 
Index, iShares MSCI Malaysia Index, iShares MSCI Japan Index, iShares 
MSCI Taiwan Index and iShares MSCI United Kingdom Index Funds will not 
concentrate its investments (i.e., hold 25% or more of its total assets 
in the stocks of a particular industry or group of industries), except 
that, to the extent practicable, the Fund will concentrate to 
approximately the same extent that its underlying index concentrates in 
the stocks of such particular industry or group of industries.\16\
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    \16\ Telephone conversation by and between Michou Nguyen, 
Attorney, Division, and John Carey, Assistant General Counsel, NYSE, 
on November 3, 2005.
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    The iShares S&P Europe 350 Index Fund will not concentrate its 
investments (i.e., hold 25% or more of its total assets) in a 
particular industry or group of industries, except that a Fund will 
concentrate its investments to approximately the same extent that its 
underlying index is so concentrated. For purposes of this limitation, 
securities of the U.S. Government (including its agencies and 
instrumentalities), repurchase agreements collateralized by U.S. 
Government securities, and securities of state or municipal governments 
and their political subdivisions are not considered to be issued by 
members of any industry.
    BGI has represented that each of the following Funds will invest at 
all times at least ninety percent (90%) of its total assets in 
component securities that are represented in the underlying index for 
such Fund and in ADRs representing the component securities in the 
underlying index for such Fund: iShares S&P Europe 350 Index Fund; 
iShares MSCI United Kingdom Index Fund; iShares MSCI Hong Kong Index 
Fund; iShares MSCI Singapore Index Fund; iShares MSCI Japan Index Fund; 
and iShares MSCI Malaysia Index Fund. Each of these Funds will invest 
not more than ten percent (10%) of fund assets in ADRs and other 
securities \17\ that are not included in the component securities of 
their underlying index or representing the component securities of 
their underlying index.
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    \17\ Electronic mail exchange by and between Florence Harmon, 
Senior Special Counsel, Division, John Carey, Assistant General 
Counsel, NYSE, on November 9, 2005.
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    BGI has further represented that each of the following Funds will 
invest at all times at least eighty percent (80%) of its total assets 
in component securities that are represented in the underlying index 
for such Fund and in ADRs and other securities \18\ representing the 
component securities in the underlying index for such Fund, and at 
least half of the remaining twenty percent (20%) of its assets in such 
stocks or in stocks included in the relevant market but not in the 
index: iShares MSCI Brazil Index Fund; iShares MSCI South Korea Index 
Fund; and iShares MSCI Taiwan Index Fund. Each of these Funds will 
invest not more than twenty percent (20%) of fund assets in ADRs that 
are not included in the component securities of their underlying index 
or representing the component securities of their underlying index.
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    \18\ Id.
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    Finally, BGI has represented that each of the ADRs in which these 
Funds will invest shall be listed on a national securities exchange or 
the Nasdaq National Market.
    The Exchange believes that these concentration requirements and 
policies prevent any Fund from being excessively weighted in any single 
security or small group of securities and significantly reduce concerns 
that trading in an Index Fund could become a surrogate for trading a 
single or a few unregistered securities.\19\
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    \19\ 19 Id. Additionally, the MSCI and S&P index methodologies 
generally seek to have represented either 85% of the free float 
adjusted market capitalization of a country's stock market or (with 
the iShares S&P Europe 350 Index Fund) all securities comprising 95% 
of the eligible investable universe in fourteen European markets and 
the United Kingdom, which the Exchange notes makes it unlikely that 
the Funds will become surrogates for trading a single or a few 
unregistered stocks. Electronic mail exchange by and between 
Florence Harmon, Senior Special Counsel, Division, John Carey, 
Assistant General Counsel, NYSE, on November 9, 2005.
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Availability of Information Regarding iShares and the Underlying 
Indexes

    The MSCI and S&P Indexes are calculated by MSCI and S&P each 
trading day in the applicable foreign exchange markets based on 
official closing prices in such exchange markets. For each trading day, 
MSCI and S&P publicly disseminate the Index values for the previous 
day's close. The Index methodology for the MSCI Indexes, including 
weighting methodology, component selection criteria, calculation 
methodology, and changes to the Index, has been updated and is 
described in SR-NYSE 2005-70.\20\ The Index methodology for the S&P 350 
Europe Index has not materially changed from the description in the 
NYSE UTP Order.\21\ The Indexes are reported periodically in major 
financial publications and also are available through vendors of 
financial information.\22\ BGI now makes available every 60 seconds 
(through dissemination by vendors such as Bloomberg and Reuters) an 
updated index value for those Indices that are based on foreign trading 
markets whose hours overlap with the NYSE trading hours of 9:30 a.m. to 
4:15 p.m. Eastern Time (i.e., the iShares MSCISM Brazil 
Index, iShares MSCI United Kingdom Index, and iShares S&P Europe 350 
Index). Otherwise, if the foreign market is closed during NYSE trading 
hours, BGI provides closing index value on http://www.ishares.com.\23\
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    \20\ Id.
    \21\ Id.
    \22\ As the Commission has previously stated, when a broker-
dealer, or a broker-dealer's affiliate such as MSCI, is involved in 
the development and maintenance of a stock index upon which a 
product such as iShares is based, the broker-dealer or its affiliate 
should have procedures designed specifically to address the improper 
sharing of information. See Securities Exchange Act Release No. 
52178, July 29, 2005; 70 FR 46244, August 8, 2005; (SR-NYSE-2005-
41). The Exchange notes that MSCI has implemented procedures to 
prevent the misuse of material, non-public information regarding 
changes to component stocks in the MSCI Indexes. The Commission has 
stated that it believes that the information barrier procedures put 
in place by MSCI address the unauthorized transfer and misuse of 
material, non-public information. See Id.
    \23\ Electronic mail exchange by and between Florence Harmon, 
Senior Special Counsel, Division, John Carey, Assistant General 
Counsel, NYSE, on November 9, 2005.
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    To provide current pricing information for the Funds, there will be 
disseminated through the facilities of the Consolidated Tape 
Association an amount per iShare representing the sum of the estimated 
Balancing Amount effective through and including the previous business 
day plus the current value of the Deposit Securities in U.S.

[[Page 70013]]

Dollars, on a per iShare basis. This amount is referred to herein as 
the ``indicative optimized portfolio value'' (the ``IOPV'') and will be 
calculated by an independent third party such as Bloomberg L.P. The 
IOPV will be disseminated every fifteen seconds during regular NYSE 
trading hours of 9:30 a.m. to 4:15 p.m. (New York time). Because the 
Funds utilize a representative sampling strategy, the IOPV likely will 
not reflect the value of all securities included in the applicable 
indexes. In addition, the IOPV will not necessarily reflect the precise 
composition of the current portfolio of securities held by the Funds at 
a particular moment. The IOPV disseminated during NYSE trading hours 
should not be viewed as a real-time update of the NAV of the Funds, 
which is calculated only once a day.\24\ It is expected, however, that 
during the trading day the IOPV will closely approximate the value per 
share of the portfolio of securities for the Funds except under unusual 
circumstances.
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    \24\ As of the date of NYSE's filing of SR-NYSE 2005-76, the NAV 
for each of the Funds is generally calculated at 4 p.m. (New York 
time) on each trading day, except that the NAV for each of the 
iShares MSCI Malaysia Index Fund, iShares MSCI South Korea Index 
Fund, and iShares MSCI Taiwan Index Fund is generally calculated at 
11 a.m. (New York time) on each trading day. Electronic mail 
exchange by and between Florence Harmon, Senior Special Counsel, 
Division, John Carey, Assistant General Counsel, NYSE, on November 
9, 2005.
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    For each of the Funds for which there is an overlap in trading 
hours between the foreign and U.S. markets, the IOPV calculator will 
update the applicable IOPV every 15 seconds to reflect price changes in 
the applicable foreign market or markets, and convert such prices into 
U.S. dollars based on the currency exchange rate. For all Funds, 
(including Funds for which there is no overlap in trading hours between 
the foreign and U.S. markets), when the foreign market or markets are 
closed but U.S. markets are open, the IOPV will be updated every 15 
seconds to reflect changes in currency exchange rates after the foreign 
market closes. The IOPV will also include the applicable cash component 
for each Fund.
    The Exchange notes that, except as modified by this filing, all 
representations made by the Exchange in SR-NYSE-2002-27 and SR-NYSE-
2004-27 relating to regulation of UTP trading of the Funds, including 
surveillance procedures, Information Memos and due diligence, among 
other matters, will be fully applicable to trading of the Funds upon 
Exchange listing.

Stop and Stop Limit Orders

    Commentary .30 to Exchange Rule 13 provides that stop and stop 
limit orders in an ICU shall be elected by a quotation, but specifies 
that if the electing bid or an offer is more than 0.10 points away from 
the last sale and is for the specialist's dealer account, prior Floor 
Official approval is required for the election to be effective. The 
Exchange states that this rule applies to ICUs generally.

Rule 460.10

    Rule 460.10 generally precludes certain business relationships 
between an issuer and the specialist (or its affiliate) in the issuer's 
securities. 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 net asset value of 
the ETF shares. A specialist (or its affiliate) 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.

Trading Halts

    In order to halt the trading of the Funds, the Exchange may 
consider, among other things, factors such as the extent to which 
trading is not occurring in underlying security(s) and whether other 
unusual conditions or circumstances detrimental to the maintenance of a 
fair and orderly market are present. In addition, trading in Fund 
shares is subject to trading halts caused by extraordinary market 
volatility pursuant to Exchange Rule 80B. The Exchange will suspend 
trading in a Fund if the Index value or IOPV applicable to such Fund is 
no longer calculated or disseminated.\25\
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    \25\ In the event an Index value or IOPV is no longer calculated 
or disseminated, the Exchange would immediately contact the 
Commission to discuss alternative measures that may be appropriate 
under the circumstances.
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Prospectus or Product Description Delivery

    The Commission has granted iShares, Inc. an exemption from certain 
prospectus delivery requirements under section 24(d) \26\ of the 1940 
Act.\27\ Any product description used in reliance on a section 24(d) 
exemptive order will comply with all representations made therein and 
all conditions thereto. The Exchange, in an Information Memo 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 
the Funds and will refer members and member organizations to NYSE Rule 
1100(b). The Information Memo will also advise members and member 
organizations that delivery of a prospectus to customers in lieu of a 
product description would satisfy the requirements of Rule 1100(b).
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    \26\ 15 U.S.C. 80a-24.
    \27\ See, In the Matter of iShares, Inc., et al., Investment 
Company Act Release No. 25623 (June 25, 2002).
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Surveillance Procedures

    The Exchange will utilize its existing surveillance procedures 
applicable to ICUs to monitor trading in the Funds. The Exchange 
believes that these procedures are adequate to monitor Exchange trading 
of the Funds.
    The Exchange believes that surveillance procedures applicable to 
trading in iShares are comparable to those applicable to other ICUs 
currently trading on the Exchange. The Exchange believes that its 
surveillance procedures, which the Exchange has filed with the 
Commission, are adequate to properly monitor the trading of the Funds. 
The Exchange's current trading surveillances focus on detecting 
securities trading outside their normal patterns. When such situations 
are detected, surveillance analysis follows and investigations are 
opened, where appropriate, to review the behavior of all relevant 
parties for all relevant trading violations. The Exchange is able to 
obtain information regarding trading in both the Fund shares and the 
component securities through NYSE members, in connection with such 
members' proprietary or customer trades which they effect on any 
relevant market. In addition, the Exchange may obtain trading 
information via the Intermarket Surveillance Group (``ISG'') from other 
exchanges who are members or affiliates of the ISG.

Original and Annual Listing Fees

    The original listing fee applicable to each Fund for listing on the 
Exchange is $5,000, and the continuing fee would be $2,000 for each 
Fund, paid annually.

[[Page 70014]]

Trading Hours

    The trading hours for the Funds on the Exchange will be 9:30 a.m. 
to 4:15 p.m.
2. Statutory Basis
    The NYSE believes that its proposal is consistent with section 6(b) 
of the Act \28\ in general, and furthers the objectives of section 
6(b)(5) of the Act \29\ in particular, in that it is designed to 
prevent fraudulent and manipulative acts and practices, promote just 
and equitable principles of trade, remove impediments to and perfect 
the mechanism of a free and open market and national market system and, 
in general, to protect investors and the public interest.
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    \28\ 15 U.S.C. 78f(b).
    \29\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The NYSE does not believe that the proposed rule change will impose 
any inappropriate burden on competition 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 NYSE neither solicited nor received written comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the proposed rule change: (i) Does not significantly affect 
the protection of investors or the public interest; (ii) does not 
impose any significant burden on competition; and (iii) by its terms, 
does not become operative for 30 days after the date of filing (or such 
shorter time as the Commission may designate if consistent with the 
protection of investors and the public interest), the proposed rule 
change has become effective pursuant to section 19(b)(3)(A) of the Act 
\30\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\31\ As required 
under Rule 19b-4(f)(6)(iii),\32\ the Exchange provided the Commission 
with written notice of its intent to file the proposed rule change, 
along with a brief description and text of the proposed rule change, at 
least five business days prior to the date of the filing of the 
proposed rule change.
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    \30\ 15 U.S.C. 78s(b)(3)(A).
    \31\ 17 CFR 240.19b-4(f)(6).
    \32\ 17 CFR 240.19b-4(f)(6)(iii).
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    A proposed rule change filed under Rule 19b-4(f)(6) normally may 
not become operative prior to 30 days after the date of filing.\33\ 
However, Rule 19b-4(f)(6)(iii) \34\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. In addition, the Exchange has 
requested that the Commission waive the 30-day operative delay and 
render the proposed rule change to become operative immediately. The 
Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
Waiver of the 30-day operative delay would enable investors to avail 
themselves immediately to trading opportunities in the Funds. In 
addition, the Commission notes that the Funds have been previously 
approved for trading on the NYSE.\35\ Therefore, the Commission does 
not believe that the proposed rule change raises new regulatory issues. 
For the reasons stated above, the Commission designates the proposal to 
become operative on November 18, 2005.\36\
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    \33\ Id.
    \34\ Id.
    \34\ See supra, footnote 7.
    \36\ For purposes of waiving the operative date of this proposal 
only, the Commission has considered the impact of the proposed rule 
on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in the furtherance of the purposes of the Act.

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. 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-NYSE-2005-76 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-9309.

    All submissions should refer to File Number SR-NYSE-2005-76. 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. Copies of 
such filing also will be available for inspection and copying at the 
principal office of the NYSE. 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-NYSE-2005-76 and should be submitted on or before 
December 9, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\37\
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    \37\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
 [FR Doc. E5-6375 Filed 11-17-05; 8:45 am]
BILLING CODE 8010-01-P