[Federal Register: November 29, 2005 (Volume 70, Number 228)]
[Notices]
[Page 71574-71583]
[DOCID:fr29no05-111]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52816; File No. SR-NYSE-2005-70]

Self-Regulatory Organizations; New York Stock Exchange, Inc.;
Notice of Filing and Order Granting Accelerated Approval of Proposed
Rule Change Relating to iShares [supreg] MSCI Index Funds

November 21, 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 6, 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 Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons and is approving the
proposal on an accelerated basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.

---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange 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
MSCI \SM\ Belgium Index Fund, iShares MSCI France Index Fund, iShares
MSCI Italy Index Fund, iShares MSCI Netherlands Index Fund, iShares
MSCI Spain Index Fund, iShares MSCI Sweden Index Fund, and iShares MSCI
Switzerland Index Fund.\3\
---------------------------------------------------------------------------

    \3\ MSCI and MSCI Indices are registered service marks of Morgan
Stanley & Co., Incorporated.
---------------------------------------------------------------------------

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 Exchange 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 III below. The Exchange 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, the Proposed Rule Change

1. Purpose
    The Exchange 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.\4\ The Exchange now proposes to list the following
iShares Index Funds (``Funds''), which are ICUs under section 703.16 of
the Exchange Listed Company Manual: iShares MSCI \SM\ Belgium Index
Fund, iShares MSCI France Index Fund, iShares MSCI Italy Index Fund,
iShares MSCI Netherlands Index Fund, iShares MSCI Spain Index Fund,
iShares MSCI Sweden Index Fund, and iShares MSCI Switzerland Index
Fund.\5\
---------------------------------------------------------------------------

    \4\ In 1996, the Commission approved Section 703.16 of the
Exchange Listed Company Manual (the ``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 pursuant to Rule 19b-4(e)
of the Act for the listing and trading, or the trading pursuant to
UTP, of ICUs under Section 703.16 of the Manual and Exchange Rule
1100. See Securities Exchange Act Release No. 43679 (December 5,
2000), 65 FR 77949 (December 13, 2000) (SR-NYSE-00-46).
    \5\ iShares, Inc. is registered under the Investment Company Act
of 1940 (15 U.S.C. 80a) (the ``Investment Company Act''). The
current registration statement for iShares, Inc. (the ``Registration
Statement'') was filed with the Commission on Form N-1A on December
29, 2004. Telephone conversation between David Hsu, Special Counsel,
Division of Market Regulation (``Division''), Commission, and
Michael Cavalier, Assistant General Counsel, NYSE, on October 20,
2005.
---------------------------------------------------------------------------

    The Funds are currently listed and traded on the American Stock
Exchange (``Amex'') \6\ and the issuer of the Funds, iShares, Inc.,
intends to move the listing of the Funds to the NYSE. The Funds also
trade on other securities exchanges \7\ and in the over-the-counter
market. The Exchange stated that the information below is intended to
provide a description of how the Funds were created and are traded.\8\
---------------------------------------------------------------------------

    \6\ The Funds 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 Commission has previously approved trading on
the NYSE on an 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 NYSE 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).
    \7\ 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).
    \8\ Much of the information in this filing was taken from the
Prospectus of iShares, Inc., dated January 1, 2005, as revised on
September 23, 2005, and the Statement of Additional Information
(``SAI'') of iShares, Inc., dated January 1, 2005, as revised on
September 23, 2005, and from the iShares Web site (http://www.iShares.com
). Fund information relating to the net asset value

(``NAV''), returns, dividends, component stock holdings and other
information is updated on a daily basis on the iShares Web site.
---------------------------------------------------------------------------

    The shares of the Funds are issued by iShares, Inc., an open-ended
management investment company. Barclays Global Fund Advisors
(``BGFA''), a subsidiary of Barclays Global Investors, N.A. (``BGI''),
is the investment advisor (``Advisor'') for each Fund.\9\ 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
provider (MSCI). Investors Bank and Trust Company (``IBT'') 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 Exchange or BGFA.
---------------------------------------------------------------------------

    \9\ 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 (15 U.S.C. 80a-10). 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 Commission Rule
10A-3.
---------------------------------------------------------------------------

    The underlying indexes are compiled by Morgan Stanley Capital
International (``MSCI''). MSCI is a partially-owned subsidiary of
Morgan Stanley. MSCI and Morgan Stanley do not share any employees that
are directly involved in the index compilation. MSCI employees directly
involved in the index compilation do not report directly to any Morgan
Stanley personnel. MSCI has established policies and procedures for the
handling and monitoring the dissemination of confidential, non-public
information relating to the MSCI indices. These policies and procedures
include specific ``firewall'' procedures regulating the flow of
information between MSCI and Morgan Stanley personnel. BGI and its
affiliates have no involvement in selection of component stocks in the
underlying indexes.

Operation of the Fund

    Each Fund seeks investment results that correspond generally to the
price and yield performance, before fees and expenses, of the
applicable underlying index (``Underlying Index''). Each Fund intends
to qualify as a Regulated Investment Company (``RIC'') under the
Internal Revenue Code (the ``Code''). The Funds utilize representative
sampling to invest in a representative sample of securities in the
applicable underlying index.
    Each Fund seeks to achieve its objective by investing primarily in
securities issued by companies that comprise the relevant Underlying
Index. Each Fund operates as an index fund and will not be actively
managed. Adverse performance of a security in a Fund's portfolio will
ordinarily not result in the elimination of the security from a Fund's
portfolio.
    Each Fund engages in representative sampling, which is investing in
a representative sample of securities in the Underlying Index, selected
by BGFA to have a similar investment profile as the Underlying Index.
Securities selected have aggregate investment

characteristics (based on market capitalization and industry
weightings), fundamental characteristics (such as return variability,
earnings valuation, and yield) and liquidity measures similar to those
of the relevant Underlying Index. Funds that use representative
sampling generally do not hold all of the securities that are included
in the relevant underlying index.
    From time to time, adjustments may be made in the portfolio of a
Fund in accordance with changes in the composition of the underlying
index or to maintain compliance with requirements applicable to a RIC
under the Code.\10\ For example, if at the end of a calendar quarter a
Fund would not comply with the RIC diversification tests, the Advisor
would make adjustments to the portfolio to ensure continued RIC status.
---------------------------------------------------------------------------

    \10\ In order for the Fund to qualify for tax treatment as a
RIC, it must meet several requirements under the Code. Among these
is a requirement that, at the close of each quarter of the Fund's
taxable year, (1) at least 50% of the market value of the Fund's
total assets must be represented by cash items, U.S. government
securities, securities of other RICs and other securities, with such
other securities limited for the purpose of this calculation with
respect to any one issuer to an amount not greater than 5% of the
value of the Fund's assets and not greater than 10% of the
outstanding voting securities of such issuer; and (2) not more than
25% of the value of its total assets may be invested in securities
of any one issuer, or two or more issuers that are controlled by the
Fund (within the meaning of section 851(b)(4)(B) of the Code) and
that are engaged in the same or similar trades or business (other
than U.S. government securities of other RICs).
---------------------------------------------------------------------------

    The iShares MSCI France Fund will at all times invest at least 90%
of its assets in the securities of the Underlying Index and ADRs
representing the component securities in the Underlying Index. Each of
the iShares Belgium, Italy, Netherlands, Spain, Sweden, and Switzerland
Funds will at all times invest at least 80% of its assets in securities
of the applicable Underlying Index and ADRs based on the component
securities of its Underlying Index, and at least 90% of its assets in
the securities and ADRs based on such securities of its Underlying
Index or in securities or ADRs included in the relevant market, but not
in its Underlying Index.\11\ Therefore, each of the Funds will invest
not more than 10% of fund assets in ADRs and other securities,\12\
which are not included in or based on the component securities of its
Underlying Index and are also not included in the relevant market. Each
of the ADRs in which these Funds will invest shall be listed on a
national securities exchange or the Nasdaq Stock Market.
---------------------------------------------------------------------------

    \11\ Telephone conversation between Florence Harmon, Senior
Special Counsel, Division, and Michael Cavalier, Assistant General
Counsel, NYSE, on November 15, 2005.
    \12\ Id.
---------------------------------------------------------------------------

Index Descriptions and Methodology

    Weighting. According to the Funds' SAI effective May 31, 2002, all
single-country MSCI Indices are free float weighted, i.e., companies
are included in the indices at the value of their free public float
(free float, multiplied by price). MSCI defines ``free float'' as total
shares excluding shares held by strategic investors such as
governments, corporations, controlling shareholders and management, and
shares subject to foreign ownership restrictions. In other words, the
free float of a security is the proportion of shares outstanding that
are deemed to be available for purchase in the public equity markets by
international investors. In practice, limitations on free float
available to international investors include: (i) Strategic and other
shareholdings not considered part of available free float; and (ii)
limits on share ownership for foreigners. Under MSCI's free float-
adjustment methodology, a constituent ``Inclusion Factor'' is equal to
its estimated free float rounded-up to the closest 5% for constituents
with free float equal to or exceeding 15%. For example, a constituent
security with a free float of 23.2% will be included in the index at
25% of its market capitalization. For securities with a free float of
less than 15% that are included on an exceptional basis, the estimated
free float is adjusted to the nearest 1%.
    MSCI's standard equity indices generally seek to have 85% of the
free float-adjusted market capitalization of a country's stock market
reflected in the MSCI Index for such country. Market capitalization
weighting, combined with a consistent target of 85% of free float-
adjusted market capitalization, helps ensure that each country's weight
in regional and international indices approximates its weight in the
total universe of developing and emerging markets.
    Selection Criteria. MSCI undertakes an index construction process,
which involves: (i) Defining the equity universe; (ii) adjusting the
total market capitalization of all securities in the universe for free
float available to foreign investors; (iii) classifying the universe of
securities under the Global Industry Classification Standard (the
``GICS''); and (iv) selecting securities for inclusion according to
MSCI's index construction rules and guidelines.
    The index construction process starts at the country level, with
the identification of all listed securities for that country. MSCI
classifies each company and its securities in only one country. This
allows securities to be sorted distinctly by their respective
countries. In general, companies and their respective securities are
classified as belonging to the country in which they are incorporated.
All listed equity securities, or listed securities that exhibit
characteristics of equity securities, except investment trusts, mutual
funds and equity derivatives, are eligible for inclusion in the
universe. Shares of non-domiciled companies generally are not eligible
for inclusion in the universe.
    After identifying the universe of securities, MSCI calculates the
free float-adjusted market capitalization of each security in that
universe using publicly available information. The process of free
float adjusting market capitalization involves (i) defining and
estimating the free float available to foreign investors for each
security, using MSCI's definition of free float; (ii) assigning a free
float-adjustment factor to each security; and (iii) calculating the
free float-adjusted market capitalization of each security.
    Classifying Securities Under the GICS. In addition to the free
float-adjustment of market capitalization, all securities in the
universe are assigned to an industry-based hierarchy that describes
their business activities. To this end, MSCI has designed, in
conjunction with Standard & Poor's, the GICS. This comprehensive
classification scheme provides a universal approach to industries
worldwide and forms the basis for achieving MSCI's objective of
reflecting broad and fair industry representation in its indices.
    Selecting Securities for Index Inclusion. In an attempt to ensure a
broad and fair representation in the indices of the diversity of
business activities in the universe, MSCI follows a ``bottom-up''
approach to index construction, building indices up to the industry
group level. The bottom-up approach to index construction requires a
thorough analysis and understanding of the characteristics of the
universe. This analysis drives the individual security selection
decisions, which aim to reflect the overall features of the universe in
the country index. MSCI targets an 85% free float-adjusted market
representation level within each industry group, within each country.
The security selection process within each industry group is based on
the careful analysis of: (i) Each company's business activities and the
diversification that its securities would bring to the index; (ii) the
size (based on free float-adjusted market capitalization)

and liquidity of securities;\13\ (iii) the estimated free float for the
company and its individual share classes. Only securities of companies
with estimated free float greater than 15% are, in general, considered
for inclusion. Exceptions to this general rule are made only in
significant cases, where not including a security of a large company
would compromise the index's ability to fully and fairly represent the
characteristics of the underlying market.
---------------------------------------------------------------------------

    \13\ All else being equal, MSCI targets for inclusion the most
sizable and liquid securities in an industry group. In addition,
securities that do not meet the minimum size guidelines discussed
below and/or securities with inadequate liquidity are not considered
for inclusion.
---------------------------------------------------------------------------

    Exchange Rates. The prices used to calculate the MSCI Indices are
the official exchange closing prices or those figure accepted as such.
MSCI reserves the right to use an alternative pricing source on any
given day.
    For the MSCI Indices, MSCI uses the foreign currency exchange rates
published by WM Reuters at 4 p.m. London time. MSCI uses WM Reuters
rates for all developed and emerging markets. Exchange rates are taken
daily at 4 p.m. London time by the WM Company and are sourced whenever
possible from multi-contributor quotes on Reuters. Representative
currency exchange rates are selected for each currency based on a
number of ``snapshots'' of the latest contributed quotations taken from
the Reuters service at short intervals around 4 p.m. London time. WM
Reuters provides closing bid and offer rates. MSCI uses these to
calculate the mid-point to five decimal places.
    MSCI continues to monitor currency exchange rates independently and
may, under exceptional circumstances, elect to use an alternative
currency exchange rate if the WM Reuters rate is believed not to be
representative for a given currency on a particular day.
    Changes to the Indices. According to the Registration Statement,
the MSCI Indices are maintained with the objective of reflecting, on a
timely basis, the evolution of the underlying equity markets. In
maintaining the MSCI Indices, emphasis is also placed on continuity,
replicability, and minimizing turnover in the Indices. Maintaining the
MSCI Indices involves many aspects, including additions to and
deletions from the Indices and changes in number of shares and changes
in Foreign Inclusion Factors (``FIFs'') as a result of updated free
float estimates.
    Potential additions are analyzed not only with respect to their
industry group, but also with respect to their industry or sub-industry
group, in order to represent a wide range of economic and business
activities. All additions are considered in the context of MSCI's
methodology, including the index constituent eligibility rules and
guidelines.
    In assessing deletions, it is important to emphasize that indices
must represent the full-investment cycle, including bull as well as
bear markets. Out-of-favor industries and their securities may exhibit
declining prices, declining market capitalization, and/or declining
liquidity, and yet are not deleted because they continue to be good
representatives of their industry group.
    As a general policy, changes in number of shares are coordinated
with changes in FIFs to accurately reflect the investability of the
underlying securities. In addition, MSCI continuously strives to
improve the quality of its free float estimates and the related FIFs.
Additional shareholder information may come from better disclosure by
companies or more stringent disclosure requirements by a country's
authorities. It may also come from MSCI's ongoing examination of new
information sources for the purpose of further enhancing free float
estimates and better understanding shareholder structures. When MSCI
identifies useful additional sources of information, it seeks to
incorporate them into its free float analysis.
    Overall, index maintenance can be described by three broad
categories of implementation of changes:
     Annual full country index reviews that systematically re-
assess the various dimensions of the equity universe for all countries
and are conducted on a fixed annual timetable;
     Quarterly index reviews, aimed at promptly reflecting
other significant market events; and
     Ongoing event-related changes, such as mergers and
acquisitions, which are generally implemented in the indices rapidly as
they occur.
    Potential changes in the status of countries (stand-alone,
emerging, developed) follow their own separate timetables. These
changes are normally implemented in one or more phases at the regular
annual full country index review and quarterly index review dates.
    The annual full country index review for all the MSCI Standard
Country Indices is carried out once every 12 months and implemented as
of the close of the last business day of May. The implementation of
changes resulting from a quarterly index review occurs on only three
dates throughout the year, as of the close of the last business day of
February, August, and November. Any country indices may be impacted at
the quarterly index review. MSCI Index additions and deletions due to
quarterly index rebalancings are announced at least two weeks in
advance.
    Index Holdings as of May 31, 2005. As of May 31, 2005, the iShares
MSCI Belgium Index's top three holdings were Fortis, KBC Groupe, and
Dexia. The Index's top three industries were Financials, Consumer
Staples, and Utilities. The Index components had a total market
capitalization of approximately $120.2 billion. The average total
market capitalization was approximately $5.7 billion. The ten largest
constituents represented approximately 87% of the Index weight. The
five highest weighted stocks, which represented 66% of the Index
weight, had an average daily trading volume in excess of 7.3 million
shares during the past two months. All of the component stocks traded
at least 55,000 shares in each of the previous six months.
    As of May 31, 2005, the iShares MSCI France Index's top three
holdings were Total, Sanofi-Aventis, and BNP Paribas. The Index's top
three industries were Financials, Energy, and Consumer Discretionary.
The Index components had a total market capitalization of approximately
$829.2 billion. The average total market capitalization was
approximately $39.5 billion. The ten largest constituents represented
approximately 58% of the Index weight. The five highest weighted
stocks, which represented 42% of the Index weight, had an average daily
trading volume in excess of 52.3 million shares during the past two
months. All of the component stocks traded at least 475,000 shares in
each of the previous six months.
    As of May 31, 2005, the iShares MSCI Italy Index's top three
holdings were ENI, ENEL, and Assicurazioni Generali. The Index's top
three industries were Financials, Energy, and Telecommunication
Services. The Index components had a total market capitalization of
approximately $348.8 billion. The average total market capitalization
was approximately $16.6 billion. The ten largest constituents
represented approximately 69% of the index weight. The five highest
weighted stocks, which represented 51% of the Index weight, had an
average daily trading volume in excess of 512.2 million shares during
the past two months. All of the component stocks traded at least four
million shares in each of the previous six months.
    As of May 31, 2005, the iShares MSCI Netherlands Index's top three
holdings were Royal Dutch Petroleum Co., ING

Groep, and ABN AMRO Holding. The Index's top three industries were
Energy, Financials, and Consumer Staples. The Index components had a
total market capitalization of approximately $419.4 billion. The
average total market capitalization was approximately $20.0 billion.
The ten largest constituents represented approximately 84% of the index
weight. The five highest weighted stocks, which represented 68% of the
Index weight, had an average daily trading volume in excess of 66.3
million shares during the past two months. All of the component stocks
traded at least 950,000 shares in each of the previous six months.
    As of May 31, 2005, the iShares MSCI Spain Index's top three
holdings were the Telefonica, BSCH BCO Santander Centr, and BBVA.
Index's top three industries were Financials, Telecommunication
Services, and Utilities. The Index components had a total market
capitalization of approximately $345.4 billion. The average total
market capitalization was approximately $16.4 billion. The ten largest
constituents represented approximately 85% of the index weight. The
five highest weighted stocks, which represented 69% of the Index
weight, had an average daily trading volume in excess of 283.6 million
shares during the past two months. All of the component stocks traded
at least 2.1 million shares in each of the previous six months.
    As of May 31, 2005, the iShares MSCI Sweden Index's top three
holdings were Ericsson (LM) B, Nordea Bank, and Hennes & Mauritz B. The
Index's top three industries were Industrials, Financials, and
Information Technology. The Index components had a total market
capitalization of approximately $215.0 billion. The average total
market capitalization was approximately $10.2 billion. The ten largest
constituents represented approximately 61% of the index weight. The
five highest weighted stocks, which represented 48% of the Index
weight, had an average daily trading volume in excess of 312.9 million
shares during the past two months. All of the component stocks traded
at least 750,000 shares in each of the previous six months.
    As of May 31, 2005, the iShares MSCI Switzerland Index's top three
holdings were Novartis, Nestle, and Roche Holding Genuss. The Index's
top three industries were Health Care, Financials, and Consumer
Staples. The Index components had a total market capitalization of
approximately $602.3 billion. The average total market capitalization
was approximately $28.7 billion. The ten largest constituents
represented approximately 87% of the Index weight. The five highest
weighted stocks, which represented 73% of the Index weight, had an
average daily trading volume in excess of 41.4 million shares during
the past two months. All of the component stocks traded at least
100,000 shares in each of the previous six months.

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
that, 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.\14\
---------------------------------------------------------------------------

    \14\ 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 (defined
below) 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.
---------------------------------------------------------------------------

    The Funds investment objectives, policies, and investment
strategies will be fully disclosed in the prospectus.\15\ The Funds'
Board of Directors will review the tracking error of the Funds on a
quarterly basis and based its review will consider whether any action
may be appropriate.\16\
---------------------------------------------------------------------------

    \15\ Telephone conversation between David Hsu, Special Counsel,
Division, and Michael Cavalier, Assistant General Counsel, NYSE, on
October 20, 2005.
    \16\ Id.
---------------------------------------------------------------------------

Industry Concentration Policy

    As disclosed in the Funds' prospectus, each of the Underlying
Indexes for the 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, each
Fund will concentrate to approximately the same extent that its
underlying index concentrates in the stocks of such particular industry
or group of industries.
    Each Fund intends to maintain regulated investment company
compliance, which requires, among other things, that, at the close of
each quarter of the Fund's taxable year, not more than 25% of its total
assets may be invested in the securities of any one issuer.
    The Exchange believes that these 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 in a
single or a few unregistered securities.

Issuance of Creation Units

    iShares, Inc. will issue and redeem the shares of the Funds only in
aggregations (each aggregation a ``Creation Unit'') of substantial
size, which varies for the various Funds. The size of a Creation Unit
for each Fund and estimated value of a Creation Unit for each Fund as
of September 28, 2005 is as follows.\17\
---------------------------------------------------------------------------

    \17\ As noted, the MSCI Index methodology generally seeks to
have represented 85% of the free float-adjusted market
capitalization of a country's stock market or regional market, which
also makes it unlikely that the Funds will become a surrogate for
trading a single or a few unregistered stocks. Electronic mail
exchange between Florence Harmon, Senior Special Counsel, Division,
John Carey, Assistant General Counsel, NYSE, on November 9, 2005.

----------------------------------------------------------------------------------------------------------------
                                                                    Shares per       Price per    Est. value per
                                                                   creation unit       share       creation unit
----------------------------------------------------------------------------------------------------------------
iShares MSCI Belgium............................................          40,000          $19.17        $766,800
iShares MSCI France.............................................         200,000           26.12       5,224,000
iShares MSCI Italy..............................................         150,000           26.38       3,957,000
iShares MSCI Netherlands........................................          50,000           19.15         957,500

iShares MSCI Spain..............................................          75,000           37.50       2,812,500
iShares MSCI Sweden.............................................          75,000           22.10       1,657,500
iShares MSCI Switzerland........................................         125,000           18.07       2,258,750
----------------------------------------------------------------------------------------------------------------

    The number of shares of each Fund outstanding as of September 28,
2005 was 2.48 million (Belgium); 3.20 million (France); 1.65 million
(Italy); 3.35 million (Netherlands); 1.88 million (Spain); 2.93 million
(Sweden); and 4.50 million (Switzerland). These numbers exceed the
minimum number of shares to be issued in connection with initial
listing of the Funds on the Amex in 1996.\18\ A minimum of two Creation
Units of the Funds were required to be outstanding at the time of
initial listing on the Amex.
---------------------------------------------------------------------------

    \18\ See Securities Exchange Act Release No. 36947 (March 8,
1996) 61 FR 10606 (March 14, 1996) (SR-Amex-95-43).
---------------------------------------------------------------------------

    These number of shares outstanding also exceeds the 100,000 minimum
number of shares required to be outstanding in connection with listing
of ICUs Investment Company Units under Rule 19b-4(e) under the Act
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.\19\
---------------------------------------------------------------------------

    \19\ See Securities Exchange Act Release No. 50505 (October 8,
2004), 69 FR 61280 (October 15, 2004) (SR-NYSE-2004-55), note 51.
---------------------------------------------------------------------------

    The consideration for purchase of a Creation Unit of shares of a
Fund generally consists of the in-kind deposit of a designated
portfolio of equity securities (the ``Deposit Securities'')
constituting an optimized representation of the Fund's benchmark
foreign securities index and an amount of cash computed as described
below (the ``Cash Component''). Together, the Deposit Securities and
the Cash Component constitute the ``Portfolio Deposit,'' which
represents the minimum initial and subsequent investment amount for
shares of a Fund. The Cash Component is an amount equal to the Dividend
Equivalent Payment (as defined below), plus or minus, as the case may
be, a Balancing Amount (as defined below). The deposit of the requisite
Deposit Securities and the Balancing Amount are collectively referred
to herein as a ``Fund Deposit.'' The ``Dividend Equivalent Payment''
enables iShares, Inc. to make a complete distribution of dividends on
the next dividend payment date, and is an amount equal, on a per
Creation Unit basis, to the dividends on all the Securities held by the
relevant Fund with ex-dividend dates within the accumulation period for
such distribution (the ``Accumulation Period''), net of expenses and
liabilities for such period, as if all of the Portfolio Securities had
been held by iShares, Inc. for the entire Accumulation Period. The
``Balancing Amount'' is an amount equal to the difference between (x)
the NAV (per Creation Unit) of the Fund and (y) the sum of (i) the
Dividend Equivalent Payment and (ii) the market value (per Creation
Unit) of the securities deposited with iShares, Inc. (the sum of (i)
and (ii) is referred to as the ``Deposit Amount''). The Balancing
Amount serves the function of compensating for any differences between
the net asset value per Creation Unit and the Deposit Amount.
    BGFA makes available through the National Securities Clearing
Corporation (``NSCC'') on each Business Day, prior to the opening of
business on the NYSE (currently 9:30 a.m., Eastern time),\20\ the list
of the names and the required number of shares of each Deposit Security
to be included in the current Portfolio Deposit (based on information
at the end of the previous Business Day) for each Fund. Such Portfolio
Deposit is applicable, subject to any adjustments as described below,
in order to effect purchases of Creation Units of iShares of a given
Fund until such time as the next announced Portfolio Deposit
composition is made available.
---------------------------------------------------------------------------

    \20\ Usually, NSCC disseminates the estimated Portfolio
Securities and Cash Amount (see below) between 6 p.m. and 8 p.m.
(Eastern time) on the prior business day for both creation and
redemption requests placed the following day. Telephone conversation
between Florence Harmon, Senior Special Counsel, Division, and
Michael Cavalier, Assistant General Counsel, NYSE, on November 20,
2005.
---------------------------------------------------------------------------

    The identity and number of shares of the Deposit Securities
required for a Portfolio Deposit for each Fund changes as rebalancing
adjustments and corporate action events are reflected from time to time
by BGFA with a view to the investment objective of the Fund. The
composition of the Deposit Securities may also change in response to
adjustments to the weighting or composition of the securities
constituting the relevant securities index.
    In addition, iShares, Inc. reserves the right to permit or require
the substitution of an amount of cash (i.e., a ``cash in lieu'' amount)
to be added to the Cash Component to replace any Deposit Security which
may not be available in sufficient quantity for delivery or for other
similar reasons. The adjustments described above will reflect changes,
known to BGFA on the date of announcement to be in effect by the time
of delivery of the Portfolio Deposit, in the composition of the subject
index being tracked by the relevant Fund, or resulting from stock
splits and other corporate actions. Thus, in addition to the list of
names and numbers of securities constituting the current Deposit
Securities of a Portfolio Deposit, on each Business Day prior to the
opening of the market, NSCC will make available the estimated Cash
Component effective through and including the previous Business Day,
per outstanding iShares of each Fund.
    Creation Units of shares may be purchased only by or through a
Depository Trust Company (``DTC'') Participant that has entered into an
Authorized Participant agreement with the Distributor (``Authorized
Participant''). Authorized Participants must submit an irrevocable
Creation Unit request before 4 p.m. (Eastern time) on any business day
in order to receive that business day's NAV (and applicable Cash
Component). Such Authorized Participant will agree pursuant to the
terms of such Authorized Participant Agreement on behalf of itself or
any investor on whose behalf it will act, as the case may be, to
certain conditions, including that such Authorized Participant will
make available in advance of each purchase of iShares an amount of cash
sufficient to pay the Cash Component, once the net asset value of a
Creation Unit is next determined after receipt of the purchase order in
proper form, together with the transaction fee. A purchase transaction
fee payable to iShares, Inc. is imposed to compensate iShares, Inc. for
the transfer and other transaction costs of a Fund associated with the
issuance of Creation Units. The fee ranges from $700 to $2,900 for the
Funds.

Redemption of Creation Units

    Shares of a Fund may be redeemed only in Creation Units at their
net asset value, NAV, next determined after receipt of a redemption
request in proper form by the Distributor.
    With respect to each Fund, BGFA makes available through the NSCC
immediately prior to the opening of business on the NYSE (currently
9:30 a.m., Eastern time) on each business day, the Portfolio Securities
that will be applicable (subject to possible amendment or correction)
to redemption requests received in proper form on that day. Unless cash
redemptions are available or specified for a Fund, the redemption
proceeds for a Creation Unit generally consist of Deposit Securities as
announced by BGFA through the NSCC on the Business Day of the request
for redemption, plus cash in an amount equal to the difference between
the NAV of the shares being redeemed, as next determined after a
receipt of a request in proper form, and the value of the Deposit
Securities, less the redemption transaction fee. The redemption
transaction fee is deducted from such redemption proceeds. A redemption
transaction fee payable to iShares, Inc. is imposed to offset transfer
and other transaction costs that may be incurred by the relevant Fund,
including market impact expenses relating to disposing of portfolio
securities. This fee ranges from $700 to $2,900 for the Funds.
    Redemption requests in respect of Creation Units of any Fund must
be submitted to the Distributor by or through an Authorized
Participant. For most Funds, an Authorized Participant must submit an
irrevocable redemption request before 4 p.m. (Eastern time) on any
business day in order to receive that business day's NAV (and
applicable Cash Component).
    Owners of iShares may sell them in the secondary market, but, in
order to redeem the shares through the Funds, an owner must accumulate
enough shares to constitute a creation unit.\21\
---------------------------------------------------------------------------

    \21\ Telephone conversation between David Hsu, Special Counsel,
Division, and Michael Cavalier, Assistant General Counsel, NYSE, on
October 20, 2005.
---------------------------------------------------------------------------

Availability of Information Regarding iShares and the Underlying
Indexes

    The MSCI Indexes are calculated by MSCI for each trading day in the
applicable foreign exchange markets based on official closing prices in
such exchange markets.\22\ For each trading day, MSCI publicly
disseminates the Index values for the previous day's close. The Index
values are reported periodically in major financial publications and
also are available through vendors of financial information. For all of
the Funds, MSCI or third-party major market data vendors now makes
available at least every 60 seconds an updated index value for the
Indexes when foreign trading market hours overlap with the NYSE trading
hours of 9:30 a.m. to 4:15 p.m. Eastern Time. Otherwise, when the
foreign market is closed during NYSE trading hours, the Funds provide
closing index values on http://www.ishares.com. \23\

---------------------------------------------------------------------------

    \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. Electronic mail exchange between
Florence Harmon, Senior Special Counsel, Division, John Carey,
Assistant General Counsel, NYSE, on November 9, 2005.
    \23\ Electronic mail exchange between Florence Harmon, Senior
Special Counsel, Division, John Carey, Assistant General Counsel,
NYSE, on November 9, 2005.
---------------------------------------------------------------------------

    iShares, Inc. will cause to be made available daily the names and
required number of shares of each of the securities to be deposited in
connection with the issuance of the Funds' shares in Creation Unit size
aggregations for the Funds, as well as information relating to the
required cash payment representing, in part, the amount of accrued
dividends for the Funds. This information will be made available to the
Funds' Advisor and to any NSCC participant requesting such information.
In addition, other investors can request such information directly from
the Funds' distributor. The NAV for the Funds is calculated directly by
the Fund administrator (IBT) once a day, generally at 4 p.m., Eastern
Time.\24\ The NAV will also be available to the public on http://www.iShares.com
, from the Fund distributor by means of a toll-free

number, and to NSCC participants through data made available from the
NSCC.
---------------------------------------------------------------------------

    \24\ Electronic mail exchange between Florence Harmon, Senior
Special Counsel, Division, John Carey, Assistant General Counsel,
NYSE, on November 9, 2005.
---------------------------------------------------------------------------

    To provide current pricing information for the Funds, there will be
disseminated through the facilities of the Consolidated Tape
Association (``CTA'') 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.
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 15 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. 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.
    For each of the Funds, there is an overlap in trading hours between
the foreign and U.S. markets. Therefore, 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. 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.
    There will also be disseminated a variety of data with respect to
the Fund on a daily basis by means of CTA and CQ High Speed Lines,
which will be made available prior to the opening of trading on the
Exchange. Information with respect to recent NAV, shares outstanding,
estimated cash amount and total cash amount per Creation Unit
Aggregation will be made available prior to the opening of the
Exchange. In addition, the Web site for the Funds, which will be
publicly accessible at no charge, will contain the following
information, on a per iShare basis, for the Funds: (i) The prior
business day's NAV and the mid-point of the bid-ask price at the time
of calculation of such

NAV (``Bid/Ask Price'') \25\ and a calculation of the premium or
discount of such price against such NAV; and (ii) data in chart format
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.
---------------------------------------------------------------------------

    \25\ The Bid-Ask Price of the Funds is determined using the
highest bid and lowest offer on the Exchange as of the time of
calculation of the Funds' NAV.
---------------------------------------------------------------------------

    The closing prices of the Funds' Deposit Securities are readily
available from, as applicable, the relevant exchanges, automated
quotation systems, published or other public sources in the relevant
country, or online information services such as Bloomberg or Reuters.
The exchange rate information required to convert such information into
U.S. dollars is also readily available in newspapers and other
publications and from a variety of on-line services. The Exchange
believes that dissemination of the IOPV based on the Deposit Securities
provides additional information regarding the Funds that is not
otherwise available to the public and is useful to professionals and
investors in connection with trading shares of the Funds on the
Exchange or the creation or redemption of Fund shares.

Dividends and Distributions

    Dividends from net investment income, including any net foreign
currency gains, are accrued and declared and paid at least annually and
any net realized securities gains are distributed at least annually. In
order to improve tracking error or comply with distribution
requirements of the Code, dividends may be declared more frequently
than annually for certain Funds. The final dividend amount is also
disseminated by the Funds to Bloomberg and other sources. The Funds
will not make the DTC book-entry Dividend Reinvestment Service (the
``Service'') available for use by beneficial owners for reinvestment of
their cash proceeds but certain individual brokers may make the Service
available to their clients.
    Beneficial owners of iShares will receive all of the statements,
notices, and reports required under the Investment Company Act and
other applicable laws. They will receive, for example, annual and semi-
annual reports, written statements accompanying dividend payments,
proxy statements, annual notifications detailing the tax status of
distributions, Internal Revenue Service Form 1099-DIVs, etc. Because
iShares Inc.'s records reflect ownership of iShares by DTC only,
iShares, Inc. will make available applicable statements, notices, and
reports to the DTC Participants who, in turn, will be responsible for
distributing them to the beneficial owners.

Other Issues

    Information Memo. The Exchange will distribute an Information Memo
(``Information Memo'') to its members in connection with the trading of
the Funds. The Information Memo will discuss the special
characteristics and risks of trading this type of security.
Specifically, the Information Memo, among other things, will discuss
what the Funds are, how they are created and redeemed, requirements
regarding delivery of a prospectus or Product Description by members
and member firms to investors purchasing shares of the Fund prior to or
concurrently with the confirmation of a transaction, applicable
Exchange rules, dissemination information, trading information and the
applicability of suitability rules (including NYSE Rule 405). The
Information Memo will also discuss exemptive, no-action and
interpretive relief granted by the Commission from section 11(d)(1) and
certain rules under the Act, including Rule 10a-1, Rule 10b-10, Rule
14e-5, Rule 10b-17, Rule 11d1-2, Rules 15c1-5 and 15c1-6, and Rules 101
and 102 of Regulation M under the Act.
    Purchases and Redemptions in Creation Unit Size. In the Information
Memo referenced above, members and member organizations will be
informed that procedures for purchases and redemptions of iShares in
Creation Unit size are described in the Fund prospectus and SAI, and
that iShares are not individually redeemable but are redeemable only in
Creation Unit size aggregations or multiples thereof.
    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.
    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. This rule applies to ICUs generally.
    Exchange Rule 460.10. Exchange Rule 460.10 generally precludes
certain business relationships between an issuer and the specialist (or
its affiliate) in the issuer's securities. Exceptions in Exchange Rule
460.10 permit specialists in Fund 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 based on the net asset value of the Fund shares. A
specialist (or its affiliate) may acquire a position in excess of 10%
of the outstanding issue of the Fund 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 Hours and Trading Increment. The trading hours for the
Funds on the Exchange will be 9:30 a.m. to 4:15 p.m. The minimum
trading increment is $0.01.
    Due Diligence/Suitability. The Exchange represents that the Memo to
members will note, for example, Exchange responsibilities including
that before an Exchange member, member organization, or employee
thereof recommends a transaction in the Funds, a determination must be
made that the recommendation is in compliance with all applicable
Exchange and Federal rules and regulations, including due diligence
obligations under Exchange Rule 405 (Diligence as to Accounts).
    Trading Halts. In order to halt the trading of the Fund, 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 halt trading in a Fund if the Index value or IOPV
applicable to such Fund is no longer calculated or disseminated.\26\
---------------------------------------------------------------------------

    \26\ In the event an Index value or IOPV is no longer calculated
or disseminated, the Exchange would immediately contact the
Commission to discuss appropriate measures that may be appropriate
under the circumstances. Telephone conversation between Florence
Harmon, Senior Special Counsel, Division, and Michael Cavalier,
Assistant General Counsel, NYSE, on November 20, 2005.
---------------------------------------------------------------------------

    Prospectus or Product Description Delivery. The Commission has
granted iShares, Inc. an exemption from certain

prospectus delivery requirements under section 24(d) \27\ of the
Investment Company Act.\28\ 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 a 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 Exchange
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 Exchange Rule
1100(b).
---------------------------------------------------------------------------

    \27\ 15 U.S.C. 80a-24(d).
    \28\ See In the Matter of iShares, Inc., et al., Investment
Company Act Release No. 25623 (June 25, 2002).
---------------------------------------------------------------------------

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.
    Exchange surveillance procedures applicable to trading in iShares
are comparable to those applicable to other ICUs currently trading on
the Exchange. The Exchange's 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 that 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.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with section 6(b)(5) of the Act \29\ requiring that an exchange have
rules that are designed, among other things, to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to remove impediments to, and perfect the
mechanism of a free and open market and, in general, to protect
investors and the public interest.
---------------------------------------------------------------------------

    \29\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

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

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

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

III. 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_ADDRESS>Please include

File Number SR-NYSE-2005-70 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 20549-9303.
    All submissions should refer to File Number SR-NYSE-2005-70. 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 Room. Copies of such
filing also will be available for inspection and copying at the
principal office of the Exchange. 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-2005-70 and should be submitted on or before
December 20, 2005.

IV. Commission Findings

    The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder, applicable to a national securities exchange.\30\ In
particular, the Commission finds that the proposed rule change is
consistent with Section 6(b)(5) of the Act \31\ and will promote just
and equitable principles of trade, and facilitate transactions in
securities, and, in general, protect investors and the public interest.
The Commission believes that the Exchange's listing standards, trading
rules, suitability and disclosure rules for the Funds are consistent
with the Act. The Commission also believes that the proposed rule
change raises no issues that have not been previously considered by the
Commission. The Commission notes that it previously approved the
original listing and trading of the Funds on the Amex.\32\ Further,
with respect to each of the following key issues, the Commission
believes that the Funds satisfy established standards.
---------------------------------------------------------------------------

    \30\ In approving this proposal, the Commission has considered
its impact on efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
    \31\ 15 U.S.C. 78f(b)(5).
    \32\ See Securities Exchange Act Release No. 36947 (March 8,
1996), 61 FR 10606 (March 14, 1996) (SR-Amex-95-43).
---------------------------------------------------------------------------

A. Surveillance

    The Commission notes that the Underlying Indexes are broad-based
and are composed of securities having significant trading volumes and
market capitalization, thus impeding improper trading practices in the
Shares, the ability to use the Shares to manipulate the underlying
securities, and the ability to use the Shares as a surrogate to trade
one or a few unregistered securities. Nevertheless, the NYSE represents
that its surveillance procedures applicable to trading in the proposed
iShares are adequate to properly monitor the trading of the Funds. The
Exchange also is able to obtain information regarding

trading in both the Fund shares and the Component Securities by its
members on any relevant market; in addition, the Exchange may obtain
trading information via the ISG from other exchanges who are members or
affiliates of the ISG.
    As 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. The Commission notes that
the Exchange has represented that MSCI has implemented procedures to
prevent the misuse of material, non-public information regarding
changes to component stocks in the MSCI Indices.

B. Dissemination of Information about the Shares

    In approving the Funds for listing and trading on the NYSE, the
Commission notes that the Underlying Indexes are broad-based indexes.
If there is an overlap between the foreign jurisdiction and the NYSE
trading hours, these index values are disseminated through various main
market data vendors at least every 60 seconds during such overlap in
trading hours. Otherwise, the Funds provide the Index closing value at
http://www.iShares.com. Additionally, the Commission notes that the

Exchange will disseminate through the facilities of CTA during NYSE
trading hours at least every 15 seconds a calculation of the IOPV
(which will reflect price changes in the applicable foreign market and
changes in currency exchange rates), along with an updated market value
of the Shares. Comparing these two figures will help investors to
determine whether, and to what extent, the Shares may be selling at a
premium or discount to NAV and thus will facilitate arbitrage of the
Shares in relation to the Index component securities.
    The Commission also notes that the Web site for the Funds (http://www.iShares.com
), which is and will be publicly accessible at no

charge, will contain the Shares' prior business day NAV, the reported
closing price, and a calculation of the premium or discount of such
price in relation to the closing NAV.

C. Listing and Trading

    The Commission finds that the Exchange's rules and procedures for
the proposed listing and trading of the Funds are consistent with the
Act. Shares of the Funds will trade as equity securities subject to
NYSE rules including, among others, rules governing trading halts,
specialist activities, stop and stop limit orders, prospectus delivery,
and customer suitability requirements. In addition, the Funds will be
subject to NYSE listing and delisting/halt rules and procedures
governing the trading of Index Fund Shares on the Exchange. The
Commission believes that listing and delisting criteria for the Shares
should help to maintain a minimum level of liquidity and therefore
minimize the potential for manipulation of the Shares. Finally, the
Commission believes that the Information Memo the Exchange will
distribute will inform members and member organizations about the
terms, characteristics, and risks in trading the Shares, including
suitability and prospectus delivery requirements.

D. Accelerated Approval

    The Commission finds good cause, pursuant to section 19(b)(2) of
the Act,\33\ for approving the proposed rule change prior to the
thirtieth day after the date of publication of notice in the Federal
Register. The Commission notes that the proposal is consistent with the
listing and trading standards in NYSE Rule 703.16 (ICUs), and the
Commission has previously approved the listing of these securities on
the Amex.\34\ In addition, the Commission finds that this proposal is
similar to several instruments currently listed and traded on the
exchange.\35\ Therefore, the Commission does not believe that the
proposed rule change raises issues that have not been previously
considered by the Commission.
---------------------------------------------------------------------------

    \33\ 15 U.S.C. 78s(b)(2).
    \34\ See Securities Exchange Act Release No. 36947 (March 8,
1996), 61 FR 10606 (March 14, 1996) (approving the listing and
trading of the ICUs for trading on the Amex).
    \35\ See, e.g., Securities Exchange Act Release No. 52178 (July
29, 2005), 70 FR 46244, (August 9, 2005) (SR-NYSE-2005-41).
---------------------------------------------------------------------------

V. Conclusion

    It Is Therefore Ordered, pursuant to section 19(b)(2) of the
Act,\36\ that the proposed rule change (SR-NYSE-2005-70), is hereby
approved on an accelerated basis.
---------------------------------------------------------------------------

    \36\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\37\
---------------------------------------------------------------------------

    \37\ 17 CFR 200.30-3(a)(12).

Jonathan G. Katz,
Secretary.
 [FR Doc. E5-6626 Filed 11-28-05; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 75, Number 214 (Friday, November 5, 2010)]
[Notices]
[Pages 68336-68337]
[FR Doc No: 2010-27990]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 9169-003]

Oregon Parks and Recreation Department; Notice of Application
Accepted for Filing and Soliciting Comments, Motions To Intervene, and
Protests

October 29, 2010.
    Take notice that the following hydroelectric application has been
filed with the Commission and is available for public inspection:
    a. Type of Application: Surrender of Exemption.
    b. Project No.: 9169-003.
    c. Date Filed: August 30, 2010.
    d. Applicant: Oregon Parks and Recreation Department.
    e. Name of Project: Thompson's Mills Hydroelectric Project.
    f. Location: The project is located on the Calapooia River in Linn
County, Oregon.
    g. Filed Pursuant to: Federal Power Act, 16 U.S.C. 791a-825r.
    h. Applicant Contact: Mr. MG Devereux, Oregon Parks and Recreation

Department, 725 Summer Street, NE., Suite C, Salem, Oregon 97301, (503)
986-0735
    i. FERC Contact: Linda Stewart, telephone<PHONE_NUMBER>, and e-
mail address<EMAIL_ADDRESS>    j. Deadline for filing comments, motions to intervene, and
protests: November 29, 2010.
    All documents may be filed electronically via the Internet. See, 18
CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web
site at http://www.ferc.gov/docs-filing/efiling.asp. If unable to be
filed electronically, documents may be paper-filed. To paper-file, an
original and seven copies should be mailed to: Secretary, Federal
Energy Regulatory Commission, 888 First Street, NE., Washington, DC
20426. Commenters can submit brief comments up to 6,000 characters,
without prior registration, using the eComment system at http://www.ferc.gov/docs-filing/ecomment.asp. You must include your name and
contact information at the end of your comments. Please include the
project number (P-9619-003) on any comments, motions, or
recommendations filed.
    k. Description of Request: The applicant's proposed surrender would
include the removal of Shearer and Sodom Dams and the restoration of
each site. Additionally, the mill would be preserved in its historical
condition as a grain mill.
    l. Locations of the Application: A copy of the application is
available for inspection and reproduction at the Commission's Public
Reference Room, located at 888 First Street, NE., Room 2A, Washington,
DC 20426, or by calling<PHONE_NUMBER>. This filing may also be viewed
on the Commission's Web site at http://www.ferc.gov/docs-filing/efiling.asp. Enter the docket number excluding the last three digits in
the docket number field to access the document. You may also register
online at http://www.ferc.gov/docs-filing/esubscription.asp to be
notified via e-mail of new filings and issuances related to this or
other pending projects. For assistance, call 1-866-208-3676 or e-mail
<EMAIL_ADDRESS>for TTY, call<PHONE_NUMBER>. A copy is
also available for inspection and reproduction at the address in item
(h) above.
    m. Individuals desiring to be included on the Commission's mailing
list should so indicate by writing to the Secretary of the Commission.
    n. Comments, Protests, or Motions to Intervene: Anyone may submit
comments, a protest, or a motion to intervene in accordance with the
requirements of Rules of Practice and Procedure, 18 CFR 385.210, .211,
.214. In determining the appropriate action to take, the Commission
will consider all protests or other comments filed, but only those who
file a motion to intervene in accordance with the Commission's Rules
may become a party to the proceeding. Any comments, protests, or
motions to intervene must be received on or before the specified
comment date for the particular application.
    o. Filing and Service of Responsive Documents: Any filing must (1)
Bear in all capital letters the title ``COMMENTS'', ``PROTEST'',
``MOTION TO INTERVENE'', or ``RECOMMENDATIONS'' as applicable; (2) set
forth in the heading the name of the applicant and the project number
of the application to which the filing responds; (3) furnish the name,
address, and telephone number of the person protesting or intervening;
and (4) otherwise comply with the requirements of 18 CFR 385.2001
through 385.2005. All comments, motions to intervene, recommendations,
or protests must set forth their evidentiary basis and otherwise comply
with the requirements of 18 CFR 4.34(b). All comments, motions to
intervene, recommendations, or protests should relate to project works
which are the subject of the license surrender. Agencies may obtain
copies of the application directly from the applicant. A copy of any
protest or motion to intervene must be served upon each representative
of the applicant specified in the particular application. If an
intervener files comments or documents with the Commission relating to
the merits of an issue that may affect the responsibilities of a
particular resource agency, they must also serve a copy of the document
on that resource agency. A copy of all other filings in reference to
this application must be accompanied by proof of service on all persons
listed in the service list prepared by the Commission in this
proceeding, in accordance with 18 CFR 4.34(b) and 385.2010.

Kimberly D. Bose,
Secretary.
[FR Doc. 2010-27990 Filed 11-4-10; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 77, Number 69 (Tuesday, April 10, 2012)]
[Notices]
[Pages 21555-21556]
[FR Doc No: 2012-8524]

-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. AD12-10-000]

Reactive Power Resources; Supplemental Notice of Technical
Conference

    On February 17, 2012, the Federal Energy Regulatory Commission
(Commission) announced that a staff Technical Conference on Reactive
Power Resources will be held on April 17, 2012, beginning at 9 a.m.
(EDT) in the Commission Meeting Room at the Commission's headquarters,
located at 888 First Street NE., Washington, DC 20426. The technical
conference will be led by staff, and Commissioners may be in
attendance. The conference will be open for the public to attend.
Advance registration is not required, but is encouraged to facilitate
the building security process. You may register at the following Web
page: https://www.ferc.gov/whats-new/registration/reactive-power-4-17-12-form.asp.
    Attached to this supplemental notice is an agenda for the
conference. If any changes are made, the revised agenda will be posted
prior to the event on the Calendar of Events on the Commission's Web
site, www.ferc.gov.
    The conference will be transcribed and available by webcast.
Transcripts will be available immediately for a fee from Ace Reporting
Company<PHONE_NUMBER> or 1-800-336-6646). A free webcast of the
technical conference in this proceeding is also available. Anyone with
Internet access interested in viewing this conference can do so by
navigating to the FERC Calendar of Events at www.ferc.gov and locating
this event in the Calendar. The event will contain a link to its
webcast. The Capitol Connection provides technical support for the
webcasts and offers the

option of listening to the conferences via phone-bridge for a fee. If
you have any questions, visit www.CapitolConnection.org or call (703)
993-3100.
    FERC conferences are accessible under section 508 of the
Rehabilitation Act of 1973. For accessibility accommodations please
send an email to<EMAIL_ADDRESS>or call toll free 1-866-208-
3372 (voice) or<PHONE_NUMBER> (TTY); or send a fax to<PHONE_NUMBER> with
the required accommodations.
    For more information on this conference, please contact Mary Cain
at<EMAIL_ADDRESS>or<PHONE_NUMBER>, or Sarah McKinley at
<EMAIL_ADDRESS>or<PHONE_NUMBER>.

    Dated: April 2, 2012.
Kimberly D. Bose,
Secretary.
    The purpose of the technical conference is to examine whether the
Commission should reconsider or modify the reactive power provisions of
Order No. 661-A and examine what evidence could be developed under
Order No. 661 to support a request to apply reactive power requirements
more broadly than to individual wind generators during the
interconnection study process.

Agenda for the Technical Conference on Reactive Power Resources

AD12-10

April 17, 2012
9 a.m.-9:15 a.m. Greeting and Opening Remarks.
9:15 a.m.-12:15 p.m. Discussion of Reactive Power in Interconnection
Studies.

This panel will discuss:
     Methods used to determine the reactive power requirements
for a transmission system, and
     How system impact and system planning studies take into
account changes in technologies connected to the system.
     What evidence could be developed to support a request to
apply reactive power requirements more broadly than to individual wind
generators during the interconnection study process.

Panelists:
     Noman Williams, Vice President--Transmission Policy,
Sunflower Electric Power Corporation
     Yi Zhang, Senior Regional Transmission Engineer,
California ISO
     Eric Laverty, Director of Transmission Access Planning,
Midwest ISO
     Dmitry Kosterev, Electrical Engineer, Bonneville Power
Administration
     Robert Jenkins, Director--Utility Interconnection, First
Solar
     Kris Zadlo, Vice President, Invenergy
     Richard Kowalski, Director--Transmission Strategy and
Services, ISO New England Inc.
     Warren Lasher, Director, System Planning, ERCOT, Inc.

12:15 p.m.-1:15 p.m. Lunch Break.
1:15 p.m.-4:15 p.m. Discussion of Reactive Power Resources.

Discussion items will include:
     The technical and economic characteristics of different
types of reactive power resources, including synchronous and
asynchronous generation resources, transmission resources and energy
storage resources;
     The design options for and cost of installing reactive
power equipment at the time of interconnection as well as retrofitting
a resource with reactive power equipment;
     Other means by which reactive power is currently secured
such as through self-supply; and
     How a technology that is capable of providing reactive
power but may not be subject to the generation interconnection process
(e.g., FACTs) would be analyzed.

Panelists:
     Robert Nelson, Manager of Codes, Standards, and
Regulations, Siemens Wind Turbines--Americas
     Kris Zadlo, Vice President, Invenergy
     Robert Jenkins, Director--Utility Interconnection, First
Solar
     Michael Jacobs, Director Market and Regulatory Policy,
Xtreme Power, Vice-Chair, Electricity Storage Association Advocacy
Council
     Khaled Abdul-Rahman, Director, Power Systems Technology
Development, California ISO
     Eric Laverty, Director of Transmission Access Planning,
Midwest ISO
     Dmitry Kosterev, Electrical Engineer, Bonneville Power
Administration
     Warren Lasher, Director, System Planning, ERCOT, Inc.
[FR Doc. 2012-8524 Filed 4-9-12; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 83, Number 106 (Friday, June 1, 2018)]
[Rules and Regulations]
[Pages 25369-25370]
[FR Doc No: 2018-11771]

-----------------------------------------------------------------------

DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 117

[Docket No. USCG-2018-0386]

Drawbridge Operation Regulation; Reynolds Channel and Long Creek,
Nassau County, NY

AGENCY: Coast Guard, DHS.

ACTION: Notice of temporary deviation from drawbridge regulation.

-----------------------------------------------------------------------

SUMMARY: The Coast Guard has issued a temporary deviation from the
operating schedule that governs the Long Beach Bridge across Reynolds
Channel, mile 4.7, and the Loop Parkway Bridge across Long Creek, mile
0.7, at Nassau County, New York. This deviation is necessary to
facilitate a fireworks display and allows the bridge to remain in the
closed position for two and a half hours.

DATES: This deviation is effective from 9:30 p.m. June 30, 2018 to
11:59 p.m. on July 2, 2018.

ADDRESSES: The docket for this deviation, USCG-2018-0386, is available
at http://www.regulations.gov. Type the docket number in the ``SEARCH''
box and click ``SEARCH.'' Click on Open Docket Folder on the line
associated with this deviation.

FOR FURTHER INFORMATION CONTACT: If you have questions on this
temporary deviation, call or email Stephanie Lopez, Bridge Management
Specialist,

First District Bridge Branch, U.S. Coast Guard; telephone<PHONE_NUMBER>,
email [email protected].

SUPPLEMENTARY INFORMATION: The Town of Hempstead Department of Public
Works requested this temporary deviation and both Nassau County, the
owner of the Long Beach Bridge, and the New York State Department of
Transportation, the owner of the Loop Parkway Bridge, concur with the
request to deviate from the normal operating schedules to facilitate
the ``Annual Salute to Veterans and Fireworks Display.''
    The Long Beach Bridge across Reynolds Channel, mile 4.7, has a
vertical clearance of 22 feet at mean high water and 24 feet at mean
low water in the closed position. The existing drawbridge operating
regulation is listed at 33 CFR 117.799(g). The Loop Parkway Bridge
across Long Creek, mile 0.7, has a vertical clearance of 21 feet at
mean high water and 25 feet at mean low water in the closed position.
The existing drawbridge operating regulation is listed at 33 CFR
117.799(f).
    The temporary deviation will allow both bridges to remain closed
from 9:30 p.m. to 11:59 p.m. on June 30, 2018 with rain date of July 1,
2018. Reynolds Channel and Long Creek are transited by seasonal
recreational vessels and commercial vessels. Coordination with Coast
Guard Sector Long Island Sound has indicated no mariner objections to
the proposed short-term closure of the bridges.
    Vessels that can pass under the bridges without an opening may do
so at all times. The bridges will be able to open for emergencies.
There is no alternate route for vessels to pass.
    The Coast Guard will also inform the users of the waterways through
our Local and Broadcast Notices to Mariners of the change in operating
schedule for the bridges so that vessel operators can arrange their
transits to minimize any impact caused by the temporary deviation.
    In accordance with 33 CFR 117.35(e), the drawbridge must return to
its regular operating schedule immediately at the end of the effective
period of this temporary deviation. This deviation from the operating
regulations is authorized under 33 CFR 117.35.

    Dated: May 25, 2018.
C.J. Bisignano,
Supervisory Bridge Management Specialist, First Coast Guard District.
[FR Doc. 2018-11771 Filed 5-31-18; 8:45 am]
 BILLING CODE P