
[Federal Register: February 22, 2010 (Volume 75, Number 34)]
[Notices]               
[Page 7637-7641]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22fe10-94]                         

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-29129; 812-13570]

 
iShares Trust, et al.; Notice of Application

February 16, 2010.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application to amend a prior order under section 
12(d)(1)(J) of the Investment Company Act of 1940 (``Act'') for an 
exemption from sections 12(d)(1)(A) and (B) of the Act.

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

Summary of Application: Applicants request an order (``Order'') to 
amend an existing order that permits certain registered open-end 
management investment companies (``Investing Management Companies'') 
and unit investment trusts (``Investing UITs,'' collectively with 
Investing Management Companies, ``Investing Funds'') to acquire shares 
of other registered open-end management investment companies and unit 
investment trusts (``UITs'') that operate as exchange-traded funds 
(``ETFs'') and are outside the same group of investment companies as 
the Investing Funds (``Original Order'').\1\ The Order would modify 
certain conditions of the Original Order to permit: (a) Investing 
Management Companies that are subadvised by an investment adviser to 
such ETFs (or an affiliated person of the investment adviser) to 
acquire shares of the ETFs, and (b) Investing Funds to acquire shares 
of a series of iShares Trust that carries out its investment strategies 
by investing in a wholly owned subsidiary.
---------------------------------------------------------------------------

    \1\ iShares Trust, et al., Investment Company Act Release Nos. 
25969 (Mar. 21, 2003) (notice) and 26006 (Apr. 15, 2003) (order).

Applicants: iShares Trust (``Trust''), iShares, Inc. (``Corporation''), 
BlackRock Fund Advisors (``BFA''), BlackRock Advisors, LLC, BlackRock 
Capital Management, Inc., BlackRock Institutional Management 
Corporation, BlackRock Financial Management, Inc., BlackRock 
International Limited, and BlackRock Investment Management, LLC 
---------------------------------------------------------------------------
(collectively with BFA, ``BlackRock Advisers'').

DATES: Filing Dates: The application was filed on August 29, 2008 and 
amended on February 27, 2009, October 14, 2009,

[[Page 7638]]

and January 25, 2010. Applicants have agreed to file an amendment 
during the notice period, the substance of which is reflected in this 
notice.

Hearing or Notification of Hearing: An order granting the application 
will be issued unless the Commission orders a hearing. Interested 
persons may request a hearing by writing to the Commission's Secretary 
and serving applicants with a copy of the request, personally or by 
mail. Hearing requests should be received by the Commission by 5:30 
p.m. March 9, 2010, and should be accompanied by proof of service on 
applicants, in the form of an affidavit, or for lawyers, a certificate 
of service. Hearing requests should state the nature of the writer's 
interest, the reason for the request, and the issues contested. Persons 
who wish to be notified of a hearing may request notification by 
writing to the Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F 
Street, NE., Washington, DC 20549-1090; Applicants: Trust and 
Corporation, c/o State Street Bank and Trust Company, 200 Clarendon 
Street, Boston, MA 02116; BFA, 400 Howard Street, San Francisco, CA 
94105; BlackRock Advisors, LLC, BlackRock Capital Management, Inc., and 
BlackRock Institutional Management Corporation, 100 Bellevue Parkway, 
Wilmington, DE 19809; BlackRock Financial Management, Inc., 55 East 
52nd Street, New York, NY 10055; BlackRock International Limited, 40 
Torpichen Street, Edinburgh EH3 8JB, United Kingdom; BlackRock 
Investment Management, LLC, 800 Scudders Mill Road, Plainsboro, NJ 
08536.

FOR FURTHER INFORMATION, CONTACT: Courtney S. Thornton, Senior Counsel, 
at (202) 551-6812, or Mary Kay Frech, Branch Chief, at (202) 551-6821 
(Division of Investment Management, Office of Investment Company 
Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained via the 
Commission's Web site by searching for the file number, or for an 
applicant using the Company name box, at http://www.sec.gov/search/
search.htm, or by calling (202) 551-8090.

Applicants' Representations

    1. The Trust is a Delaware statutory trust registered under the Act 
as an open-end management investment company. The Corporation is a 
Maryland corporation registered under the Act as an open-end management 
investment company. Each of the Trust and the Corporation is organized 
as a series fund with multiple series that operate as ETFs.
    2. BFA is a California corporation registered as an investment 
adviser under the Investment Advisers Act of 1940 (``Advisers Act'') 
and serves as investment adviser to each series of the Trust and the 
Corporation. Each of BlackRock Advisors, LLC (a Delaware limited 
liability company), BlackRock Capital Management, Inc. (a Delaware 
corporation), BlackRock Institutional Management Corporation (a 
Delaware corporation), BlackRock Financial Management, Inc. (a Delaware 
corporation), BlackRock International Limited (a United Kingdom 
corporation), and BlackRock Investment Management, LLC (a Delaware 
limited liability company) is registered under the Advisers Act. Each 
BlackRock Adviser is an indirect subsidiary of BlackRock, Inc.
    3. Applicants request an Order under section 12(d)(1)(J) of the Act 
to amend the Original Order to exempt certain transactions involving 
the Trust and the Corporation from sections 12(d)(1)(A) and 12(d)(1)(B) 
of the Act. Specifically, applicants seek to expand the type of 
Investing Funds that may invest in series of the Trust or the 
Corporation beyond the limits of section 12(d)(1)(A) and (B) to include 
registered management investment companies or series thereof that are 
subadvised (as provided in section 2(a)(20)(B) of the Act) by BFA, a 
BlackRock Adviser, or any investment adviser that controls, is 
controlled by or under common control with a BlackRock Adviser 
(``BlackRock Adviser Affiliate'') but are not part of the same ``group 
of investment companies'' as the Trust or the Corporation within the 
meaning of section 12(d)(1)(G)(ii) of the Act (each a ``BlackRock 
Subadvised Fund'').\2\ Applicants request that the relief from section 
12(d)(1)(B) apply to the Trust, the Corporation, and each open-end 
management investment company or UIT (or separate series thereof, as 
applicable) registered under the Act that operates as an ETF, is 
currently or subsequently a part of the same group of investment 
companies as the Trust or the Corporation, and is advised or sponsored 
by a BlackRock Adviser or a BlackRock Adviser Affiliate,\3\ as well as 
any broker-dealer registered under the Securities Exchange Act of 1934 
(``Broker'') selling shares of an iShares Fund to an Investing Fund.
---------------------------------------------------------------------------

    \2\ An Investing Management Company will be advised by an 
investment adviser within the meaning of section 2(a)(20)(A) of the 
Act (``Advisor'') and may be advised by one or more other investment 
advisers within the meaning of section 2(a)(20)(B)) of the Act 
(each, a ``Subadviser''). An Investing Trust will have a sponsor 
(``Sponsor'') and a trustee (``Trustee'').
    \3\ Such open-end ETFs are referred to herein as ``Open-end 
iShares Funds''; such UIT ETFs are referred to herein as ``UIT 
iShares Funds.'' Open-end iShares Funds and UIT iShares Funds are 
collectively referred to as ``iShares Funds.'' An ``iShares Fund 
Affiliate'' is any investment adviser, sponsor, promoter, or 
principal underwriter of an iShares Fund, and any person 
controlling, controlled by, or under common control with any of 
those entities.
---------------------------------------------------------------------------

    4. Applicants also seek to permit Investing Funds (including 
BlackRock Subadvised Funds) to acquire shares of the iShares S&P India 
Nifty 50 Index Fund (``India Fund'') and other iShares Funds that 
operate in a manner substantially similar to the India Fund (``Future 
Funds'') in reliance on the Order. The India Fund is an iShares Fund 
that carries out its investment strategies by investing in a wholly 
owned subsidiary in the Republic of Mauritius (``India Subsidiary'') in 
excess of the limits contained in section 12(d)(1)(A) of the Act in 
reliance on certain no-action positions of the staff of the 
Commission.\4\ The India Fund operates through the India Subsidiary 
(both of which are advised by BFA) in order to take advantage of 
favorable tax treatment by the Indian government pursuant to a current 
taxation treaty between India and Mauritius. Specifically, the India 
Fund invests substantially all of its assets in the India Subsidiary, 
which, in turn, invests at least 80% of its assets in securities that 
comprise the S&P CNX Nifty Index (``Underlying Index'') and depositary 
receipts representing securities of the Underlying Index. The India 
Fund operates, and any Future Fund will operate, pursuant to the terms 
and conditions required under the Prior Orders (as defined below) 
received by one or more of the applicants that permit certain iShares 
Funds to operate as ETFs.\5\
---------------------------------------------------------------------------

    \4\ See, e.g., South Asia Portfolio, SEC No-Action Letter (Mar. 
12, 1997).
    \5\ Barclays Global Fund Advisors, et al., Investment Company 
Act Release No. 25622 (Jun. 25, 2002), as subsequently amended by 
iShares Trust, et al., Investment Company Act Release No. 26006 
(Apr. 15, 2003), Barclays Global Fund Advisors, et al., Investment 
Company Act Release No. 26175 (Sep. 8, 2003), and Barclays Global 
Fund Advisors, et al., Investment Company Act Release No. 27417 
(Jun. 23, 2006) (as amended, the ``Prior Fixed Income Order''). 
Barclays Global Fund Advisors, et al., Investment Company Act 
Release No. 24452 (May 12, 2000), iShares Trust, et al., Investment 
Company Act Release No. 25111 (Aug. 15, 2001), and iShares, Inc., et 
al., Investment Company Act Release No. 25215 (Oct. 18, 2001), each 
order as amended by iShares, Inc., et al., Investment Company Act 
Release No. 25623 (Jun. 25, 2002), iShares Trust, et al., Investment 
Company Act Release No. 26006 (Apr. 15, 2003), and Barclays Global 
Fund Advisors, Investment Company Act Release No. 26626 (Oct. 5, 
2004) (collectively and as amended, ``Prior Foreign Equity 
Orders''). Barclays Global Fund Advisors, et al., Investment Company 
Act Release No. 24451 (May 12, 2000), as amended by iShares, Inc., 
et al., Investment Company Act Release No. 25623 (Jun. 25, 2002) and 
iShares Trust, et al., Investment Company Act Release No. 26006 
(Apr. 15, 2003) (as amended, ``Prior Domestic Equity Order''). The 
Prior Fixed Income Order, Prior Foreign Equity Orders, and Prior 
Domestic Equity Order were amended by Barclays Global Fund Advisors, 
et al., Investment Company Act Release No. 27661 (Jan. 17, 2007) 
(collectively, the ``Prior Orders'').

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

[[Page 7639]]

    5. In addition to extending the exemptive relief granted in the 
Original Order, the Order would replace certain conditions in the 
Original Order with the amended and restated conditions set out below 
to reflect the possibility of a BlackRock Adviser or a BlackRock 
Adviser Affiliate serving as a Subadviser to a BlackRock Subadvised 
Fund, to permit Investing Funds to acquire shares of the India Fund and 
any Future Fund, and to update the conditions in certain other 
respects.
    6. For example, condition 1 would amend condition 1 of the Original 
Order by specifying that neither the members of an Investing Fund's 
Advisory Group \6\ nor the members of an Investing Fund's Subadvisory 
Group \7\ will control, individually or in the aggregate, an iShares 
Fund within the meaning of section 2(a)(9) of the Act. Amended 
condition 1 would not apply to the Investing Fund's Subadvisory Group 
with respect to an iShares Fund for which the Investing Fund's 
Subadviser, or a person controlling, controlled by, or under common 
control with the Investing Fund's Subadviser, acts as the investment 
adviser within the meaning of section 2(a)(20) of the Act of an Open-
end iShares Fund or as the sponsor of a UIT iShares Fund.
---------------------------------------------------------------------------

    \6\ An Investing Fund's Advisory Group is defined as an Advisor, 
Sponsor, any person controlling, controlled by, or under common 
control with an Advisor or Sponsor, and any investment company and 
any issuer that would be an investment company but for sections 
3(c)(1) or 3(c)(7) of the Act that is advised by an Advisor or 
sponsored by a Sponsor, or any person controlling, controlled by, or 
under common control with an Advisor or Sponsor.
    \7\ An Investing Fund's Subadvisory Group is defined as a 
Subadviser, any person controlling, controlled by, or under common 
control with a Subadviser, and any investment company and any issuer 
that would be an investment company but for sections 3(c)(1) or 
3(c)(7) of the Act (or portion of such investment company or issuer) 
advised or sponsored by a Subadviser or any person controlling, 
controlled by, or under common control with a Subadviser.
---------------------------------------------------------------------------

    7. In addition, condition 4 would amend condition 4 of the Original 
Order by requiring the evaluation by the board of directors/trustees of 
an Open-end iShares Fund (``Board'') of any consideration paid by the 
Open-end iShares Fund to an Investing Fund or an investment adviser, 
sponsor, promoter or principal underwriter of the Investing Fund, or 
any person controlling, controlled by, or under common control with any 
of those entities (each, an ``Investing Fund Affiliate'') in connection 
with any services or transactions, except for any services or 
transactions between an Open-end iShares Fund and its investment 
adviser(s), or any person controlling, controlled by, or under common 
control with such investment adviser(s).
    8. The Order would amend condition 6 to reflect the possibility of 
a BlackRock Adviser or a BlackRock Adviser Affiliate serving as 
Subadviser to a BlackRock Subadvised Fund by providing that no 
Investing Fund or Investing Fund Affiliate (except to the extent the 
Investing Fund Affiliate is acting in its capacity as an investment 
adviser to an Open-end iShares Fund or sponsor to a UIT iShares Fund) 
will cause an iShares Fund to purchase a security in any offering of 
securities during the existence of an underwriting or selling syndicate 
of which a principal underwriter is an Underwriting Affiliate (as 
defined below) (an ``Affiliated Underwriting'').\8\
---------------------------------------------------------------------------

    \8\ An ``Underwriting Affiliate'' is a principal underwriter in 
any underwriting or selling syndicate that is an officer, director, 
member of an advisory board, investment adviser, investment 
subadviser, employee or sponsor of the Investing Fund, or a person 
of which any such officer, director, member of an advisory board, 
investment adviser, investment subadviser, employee or sponsor is an 
affiliated person. An Underwriting Affiliate does not include any 
person whose relationship to the iShares Fund is covered by section 
10(f) of the Act.
---------------------------------------------------------------------------

    9. The Order would amend condition 12 to permit Investing Funds to 
purchase shares of the India Fund by providing that no iShares Fund in 
which an Investing Fund will invest pursuant to the Order will acquire 
securities of any other investment company or company relying on 
section 3(c)(1) or 3(c)(7) of the Act in excess of the limits contained 
in section 12(d)(1)(A) of the Act, other than the India Subsidiary or 
any similar wholly owned subsidiary of a Future Fund, and except to the 
extent permitted by rule 12d1-1 under the Act or an exemptive order 
that allows the iShares Fund to purchase shares of a money market fund 
for short term cash management purposes.
    10. Applicants state that the iShares Funds will operate in a 
manner identical to the operation of the iShares Funds under the 
Original Order, except as specifically noted by applicants, and will 
comply with all of the terms, provisions, and conditions of the 
Original Order, as amended by the present application.\9\ Applicants 
believe that the requested relief continues to meet the necessary 
exemptive standards.
---------------------------------------------------------------------------

    \9\ The Original Order also grants exemptive relief from section 
17(a) of the Act to permit certain transactions involving the Trust 
and the Corporation and Investing Funds. Applicants are not 
requesting any further exemptive relief from section 17(a) in this 
application and do not seek to amend the portion of the Original 
Order that relates to the relief granted from section 17(a). As a 
result, the Order will not permit a BlackRock Subadvised Fund that 
might be deemed to be an affiliated person of an iShares Fund, or an 
affiliated person of such a person, because it is subadvised by a 
BlackRock Adviser or a BlackRock Adviser Affiliate, to engage in a 
transaction with an iShares Fund that is prohibited by section 
17(a). The Original Order will continue to provide an exemption from 
section 17(a) for transactions involving an Investing Fund that is 
not a BlackRock Subadvised Fund and the India Fund.
---------------------------------------------------------------------------

Applicants' Legal Analysis

    1. Section 12(d)(1)(A) of the Act prohibits a registered investment 
company from acquiring shares of an investment company if the 
securities represent more than 3% of the total outstanding voting stock 
of the acquired company, more than 5% of the total assets of the 
acquiring company, or, together with the securities of any other 
investment companies, more than 10% of the total assets of the 
acquiring company. Section 12(d)(1)(B) of the Act prohibits a 
registered open-end investment company, its principal underwriter, or 
any Broker from selling its shares to another investment company if the 
sale will cause the acquiring company to own more than 3% of the 
acquired company's voting stock, or if the sale will cause more than 
10% of the acquired company's voting stock to be owned by investment 
companies generally.
    2. Section 12(d)(1)(J) of the Act provides that the Commission may 
exempt any person, security, or transaction, or any class or classes of 
persons, securities or transactions, from any provision of section 
12(d)(1) if the exemption is consistent with the public interest and 
the protection of investors. Applicants seek an exemption under section 
12(d)(1)(J) to permit (a) the Investing Funds, including the BlackRock 
Subadvised Funds, to acquire shares of the iShares Funds, (b) the 
Investing Funds to acquire shares of the India Fund and any Future 
Fund, and (c) the iShares Funds, any principal underwriter for the 
iShares Funds, and any Broker to sell shares of the iShares Funds, 
including shares of the India Fund, to the Investing Funds beyond the 
limits set forth in sections 12(d)(1)(A) and (B).

[[Page 7640]]

    3. Applicants state that the proposed arrangements and conditions 
will adequately address the policy concerns underlying sections 
12(d)(1)(A) and (B), which include concerns about undue influence by a 
fund of funds over underlying funds, excessive layering of fees, and 
overly complex fund structures. Accordingly, for the reasons set forth 
in the application and in the application for the Original Order, 
applicants believe that the requested exemptions are consistent with 
the public interest and the protection of investors.

Applicants' Conditions

    Applicants agree that any Order granting the requested relief will 
be subject to the following conditions, which will supersede the 
conditions to the Original Order:
    1. The members of an Investing Fund's Advisory Group will not 
control (individually or in the aggregate) an iShares Fund within the 
meaning of section 2(a)(9) of the Act. The members of an Investing 
Fund's Subadvisory Group will not control (individually or in the 
aggregate) an iShares Fund within the meaning of section 2(a)(9) of the 
Act. If, as a result of a decrease in the outstanding voting securities 
of an iShares Fund, an Investing Fund's Advisory Group or an Investing 
Fund's Subadvisory Group, each in the aggregate, becomes a holder of 
more than 25 percent of the outstanding voting securities of an iShares 
Fund, it will vote its shares of the iShares Fund in the same 
proportion as the vote of all other holders of the iShares Fund's 
shares. This condition does not apply to the Investing Fund's 
Subadvisory Group with respect to an iShares Fund for which the 
Investing Fund's Subadviser, or a person controlling, controlled by, or 
under common control with the Investing Fund's Subadviser, acts as the 
investment adviser within the meaning of section 2(a)(20)(A) of the Act 
(in the case of an Open-end iShares Fund) or as the sponsor (in the 
case of a UIT iShares Fund) of the iShares Fund.
    2. An Investing Fund or Investing Fund Affiliate will not cause any 
existing or potential investment by the Investing Fund in an iShares 
Fund to influence the terms of any services or transactions between the 
Investing Fund or Investing Fund Affiliate and the iShares Fund or 
iShares Fund Affiliate.
    3. The board of directors or trustees of an Investing Management 
Company, including a majority of the disinterested directors or 
trustees, will adopt procedures reasonably designed to assure that the 
Investing Management Company's Advisor(s) and Subadviser(s), if 
applicable, are conducting the investment program of the Investing 
Management Company without taking into account any consideration 
received by the Investing Management Company or an Investing Fund 
Affiliate from an iShares Fund or an iShares Fund Affiliate in 
connection with any services or transactions.
    4. Once an investment by an Investing Fund in the securities of an 
Open-end iShares Fund exceeds the limits in section 12(d)(1)(A)(i) of 
the Act, the Board, including a majority of the disinterested Board 
members, will determine that any consideration paid by an Open-end 
iShares Fund to an Investing Fund or an Investing Fund Affiliate in 
connection with any services or transactions: (i) Is fair and 
reasonable in relation to the nature and quality of the services and 
benefits received by the Open-end iShares Fund; (ii) is within the 
range of consideration that the Open-end iShares Fund would be required 
to pay to another unaffiliated entity in connection with the same 
services or transactions; and (iii) does not involve overreaching on 
the part of any person concerned. This condition does not apply with 
respect to any services or transactions between an Open-end iShares 
Fund and its investment adviser(s), or any person controlling, 
controlled by, or under common control with such investment adviser(s).
    5. The Advisor, Trustee or Sponsor, as applicable, will waive fees 
otherwise payable to it by the Investing Fund in an amount at least 
equal to any compensation (including fees received pursuant to any plan 
adopted by an Open-end iShares Fund under rule 12b-1 under the Act) 
received from an iShares Fund by the Advisor, Trustee or Sponsor, or an 
affiliated person of the Advisor, Trustee, or Sponsor, other than any 
advisory fees paid to the Advisor, Trustee or Sponsor, or its 
affiliated person by the iShares Fund, in connection with any 
investment by the Investing Fund in the iShares Fund. Any Subadviser 
will waive fees otherwise payable to the Subadviser, directly or 
indirectly, by the Investing Management Company in an amount at least 
equal to any compensation received from an iShares Fund by the 
Subadviser, or an affiliated person of the Subadviser, other than any 
advisory fees paid to the Subadviser or its affiliated person by the 
iShares Fund, in connection with any investment by the Investing 
Management Company in the iShares Fund made at the direction of the 
Subadviser. In the event that the Subadviser waives fees, the benefit 
of the waiver will be passed through to the Investing Management 
Company.
    6. No Investing Fund or Investing Fund Affiliate (except to the 
extent the Investing Fund Affiliate is acting in its capacity as an 
investment adviser to an Open-end iShares Fund or sponsor to a UIT 
iShares Fund) will cause an iShares Fund to purchase a security in any 
Affiliated Underwriting.
    7. The Board, including a majority of the disinterested Board 
members, will adopt procedures reasonably designed to monitor any 
purchases of securities by an Open-end iShares Fund in an Affiliated 
Underwriting once an investment by an Investing Fund in the securities 
of an Open-end iShares Fund exceeds the limit of section 12(d)(1)(A)(i) 
of the Act, including any purchases made directly from an Underwriting 
Affiliate. The Board will review these purchases periodically, but no 
less frequently than annually, to determine whether the purchases were 
influenced by the investment by the Investing Fund in an Open-end 
iShares Fund. The Board will consider, among other things: (i) Whether 
or not the purchases were consistent with the investment objectives and 
policies of the Open-end iShares Fund; (ii) how the performance of 
securities purchased in an Affiliated Underwriting compares to the 
performance of comparable securities purchased during a comparable 
period of time in underwritings other than Affiliated Underwritings or 
to a benchmark such as a comparable market index; and (iii) whether the 
amount of securities purchased by the Open-end iShares Fund in 
Affiliated Underwritings and the amount purchased directly from an 
Underwriting Affiliate have changed significantly from prior years. The 
Board will take any appropriate actions based on its review, including, 
if appropriate, the institution of procedures designed to assure that 
purchases of securities in Affiliated Underwritings are in the best 
interest of shareholders.
    8. Each Open-end iShares Fund will maintain and preserve 
permanently in an easily accessible place a written copy of the 
procedures described in the preceding condition, and any modifications 
to such procedures, and will maintain and preserve for a period of not 
less than six years from the end of the fiscal year in which any 
purchase in an Affiliated Underwriting occurred, the first two years in 
an easily accessible place, a written record of each purchase of 
securities in Affiliated Underwritings once an investment by an 
Investing Fund in the securities of the Open-end iShares Fund exceeds 
the limit of

[[Page 7641]]

section 12(d)(1)(A)(i) of the Act, setting forth from whom the 
securities were acquired, the identity of the underwriting syndicate's 
members, the terms of the purchase, and the information or materials 
upon which the Board's determinations were made.
    9. Before investing in an iShares Fund in excess of the limits in 
section 12(d)(1)(A), each Investing Fund and the iShares Fund will 
execute an agreement stating, without limitation, that their respective 
board of directors or trustees and their respective investment 
advisers, or their respective sponsors or trustees, as applicable, 
understand the terms and conditions of the order, and agree to fulfill 
their responsibilities under the order. At the time of its investment 
in shares of an Open-end iShares Fund in excess of the limit in section 
12(d)(1)(A)(i), an Investing Fund will notify the Open-end iShares Fund 
of the investment. At such time, the Investing Fund will also transmit 
to the Open-end iShares Fund a list of the names of each Investing Fund 
Affiliate and Underwriting Affiliate. The Investing Fund will notify 
the Open-end iShares Fund of any changes to the list of the names as 
soon as reasonably practicable after a change occurs. The iShares Fund 
and the Investing Fund will maintain and preserve a copy of the order, 
the agreement, and, in the case of an Open-end iShares Fund, the list 
with any updated information for the duration of the investment and for 
a period of not less than six years thereafter, the first two years in 
an easily accessible place.
    10. Before approving any advisory contract under section 15 of the 
Act, the board of directors or trustees of each Investing Management 
Company, including a majority of the disinterested directors or 
trustees, will find that the advisory fees charged under such contract 
are based on services provided that will be in addition to, rather than 
duplicative of, the services provided under any advisory contracts of 
any Open-end iShares Fund in which the Investing Management Company may 
invest. These findings and their basis will be recorded fully in the 
minute books of the appropriate Investing Management Company.
    11. Any sales charges and/or service fees charged with respect to 
shares of an Investing Fund will not exceed the limits applicable to a 
fund of funds as set forth in NASD Conduct Rule 2830.
    12. No iShares Fund in which an Investing Fund will invest pursuant 
to the Order will acquire securities of any other investment company or 
company relying on section 3(c)(1) or 3(c)(7) of the Act in excess of 
the limits contained in section 12(d)(1)(A) of the Act, other than the 
India Subsidiary or any similar wholly-owned subsidiary, and except to 
the extent permitted by rule 12d1-1 under the Act or an exemptive order 
that allows the iShares Fund to purchase shares of a money market fund 
for short-term cash management purposes.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-3333 Filed 2-19-10; 8:45 am]
BILLING CODE 8011-01-P

