Barclays Global Investors Canada Limited et al.

Headnote

NP 11-203 -- Exemptive relief granted to exchange-traded fund for initial and continuous distribution of units, including: relief from dealer registration requirement to permit promoter to disseminate sales communications promoting the funds subject to compliance with Part 15 of NI 81-102, relief to permit the funds' prospectus to not contain an underwriter's certificate, and relief from take-over bid requirements in connection with normal course purchases of units on the Toronto Stock Exchange subject to undertaking by unitholders not to exercise any votes attached to units which represent more than 20% of the votes attached to all outstanding units of the funds -- Securities Act (Ontario).

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., s. 25(1), 59(1), 74(1), 95-100, 104(2)(c), 147.

Rules Cited

National Instrument 81-102 Mutual Fund.

National Instrument 81-104 Commodity Pools.

November 3, 2008

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO

(the Jurisdiction)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

BARCLAYS GLOBAL INVESTORS CANADA LIMITED

(the Filer or Barclays Canada)

AND

iSHARES CONSERVATIVE CORE PORTFOLIO

BUILDER FUND, iSHARES GROWTH CORE PORTFOLIO

BUILDER FUND, iSHARES GLOBAL COMPLETION

PORTFOLIO BUILDER FUND, iSHARES ALTERNATIVES

COMPLETION PORTFOLIO BUILDER FUND

(the New iShares Funds) and such other actively managed

exchange-traded funds (ETFs), whether or not commodity

pools, as the Filer may establish (together with the

New iShares Funds, the Funds)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer on behalf of the Funds for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for exemptive relief from:

1. the dealer registration requirement of the Legislation applicable to Barclays Canada in connection with its dissemination of sales communications relating to the distribution of units of the Funds;

2. the requirement to include a certificate of the Underwriters (as defined below) in the prospectus of the Funds; and

3. the Take-Over Bid Requirements (as defined below) in connection with the purchases of units of the Funds in the normal course through the facilities of the Toronto Stock Exchange (TSX).

(the Exemption Sought)

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(a) the Ontario Securities Commission (OSC) is the principal regulator for this application, and

(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in all of the provinces and territories of Canada other than Ontario.

Interpretation

Terms defined in National Instrument 14-101 Definitions, MI 11-102 and National Instrument 81-102 Mutual Funds (NI 81-102) have the same meaning if used in this decision unless otherwise defined.

Alternative Asset Classes means asset classes including, but not limited to, commodities, real estate investment trusts, income trusts, real return bonds, emerging market equity, emerging market bonds, high yield bonds, specialty equity, infrastructure and private equity.

Baskets means, in relation to a particular Fund, a group of securities of iShares ETFs (as defined below) and/or other securities determined by Barclays Canada from time to time for the purpose of subscription orders, exchanges, redemptions and/or for other purposes.

iShares ETFs means ETFs managed by Barclays Canada or an affiliate other than the New iShares Funds.

Designated Brokers means registered brokers and dealers that enter into agreements with the Funds to perform certain duties in relation to the Funds and Designated Broker means any one of them.

Prescribed Number of Units means, in relation to a Fund, the number of units of the Fund (Units) determined by Barclays Canada from time to time for the purpose of subscription orders, exchanges, redemptions or for other purposes.

Take-Over Bid Requirements means the requirements of the Legislation relating to take-over bids, including the requirement to file a report of a take-over bid and the accompanying fee.

Underwriters means registered brokers and dealers that have entered into underwriting agreements with the Funds and that subscribe for and purchase Units from the Funds, and Underwriter means any one of them.

Unitholders means holders of Units.

Representations

This decision is based on the following facts represented by the Filer:

1. The Filer's head office is located in Toronto, Ontario. The Filer, the iShares ETFs and the New iShares Funds are not in default of securities legislation in any jurisdiction.

2. Each Fund is, or will be, a mutual fund trust governed by the laws of the province of Ontario and a reporting issuer under the laws of all of the provinces and territories of Canada.

3. Each New iShares Fund is, and certain other Funds may be, a commodity pool as such term is defined in section 1.1 of National Instrument 81-104 -- Commodity Pools (NI 81-104), in that each New iShares Fund and certain other Funds will adopt fundamental investment objectives that permit the New iShares Fund and certain other Funds to use or invest in specified derivatives in a manner that is not permitted under NI 81-102.

4. Each Fund is, or will be, subject to NI 81-102, subject to any exemptions therefrom that may be granted by securities regulatory authorities including as described below and, if applicable, to the exemptions relating to commodity pools, as such exemptions are outlined in NI 81-104.

5. The New iShares Funds have applied to the securities regulatory authorities for relief from certain requirements of NI 81-102, including relief that would enable the New iShares Funds to invest in any ETF that is primarily listed on the London Stock Exchange and managed by an affiliate of the Filer on the same basis as would be permitted under section 2.5(2) of NI 81-102 if the securities of such ETF were "index participation units" within the meaning of NI 81-102.

6. Units will be listed on the TSX. Barclays Canada has applied to list the units of each New iShares Fund on the TSX. Units will not be sold to investors until the TSX has approved the listing of the Units.

7. The Funds will be actively managed. Units will not be index participation units within the meaning of NI 81-102. Each Fund will be, and will generally be described as, an ETF.

8. The investment objective of each of the New iShares Funds, other than the iShares Alternatives Completion Portfolio Builder Fund, is to provide a specified investment result by optimizing the asset mix of its portfolio among multiple asset classes. The investment objective of the iShares Alternatives Completion Portfolio Builder Fund is to provide a specified investment result by optimizing the asset mix of its portfolio among one or more Alternative Asset Classes. It is expected that other Funds will have similar investment objectives.

9. In order to achieve its investment objective, each New iShares Fund may invest in securities issued by iShares ETFs and may also invest directly in issuers and in derivatives such as options, futures contracts, forward contracts, swaps, debt-like securities and index options. Each New iShares Fund may also use derivatives to hedge, or protect, against changes in asset class prices or foreign exchange risks. Each New iShares Funds may also invest in futures contracts in order to provide market exposure for cash held by the New iShares Funds and may hold money market instruments or cash to meet its current obligations. It is expected that other Funds will use similar investment strategies.

10. The investment objective of each New iShares Fund, as well as its investment strategy, is disclosed in the preliminary prospectus dated October 6, 2008 (the Preliminary Prospectus) and will be disclosed on an ongoing basis in the prospectus of the New iShares Funds.

11. Barclays Canada will act as trustee and manager of the Funds. Barclays Canada is registered in the categories of portfolio manager and investment counsel (or the equivalent categories of registration) in all of the provinces and territories of Canada. Barclays Canada is also registered as a Commodity Trading Manager and Limited Market Dealer in Ontario and as a Limited Market Dealer in Newfoundland and Labrador.

12. Units may only be subscribed for or purchased directly from the Funds by Underwriters or Designated Brokers and orders may only be placed for Units in the Prescribed Number of Units (or an integral multiple thereof) on any day when there is a trading session on the TSX and the primary market or exchange for the securities held by the Funds is open for trading. Under designated broker and underwriter agreements, the Designated Brokers and Underwriters agree to offer Units for sale to the public only as permitted by applicable Canadian securities legislation. Canadian securities legislation requires a prospectus to be delivered to purchasers buying Units as part of a distribution, including first purchasers of Units in the distribution on the TSX. Provided that the Designated Brokers and Underwriters comply with applicable Canadian securities legislation, first purchasers of Units in the distribution on the TSX will receive a prospectus from the Designated Brokers and Underwriters.

13. The Funds will appoint Designated Brokers to perform certain functions, which include standing in the market with a bid and ask price for Units for the purpose of maintaining liquidity for the Units.

14. Each Underwriter or Designated Broker that subscribes for Units must deliver, in respect of each Prescribed Number of Units to be issued, a Basket and cash in an amount sufficient so that the value of the Basket and cash delivered is equal to the net asset value (NAV) of the Units next determined following the receipt of the subscription order. In the discretion of Barclays Canada, the Funds may also accept cash only subscriptions for Units in an amount equal to the NAV of the Units next determined following the receipt of the subscription order.

15. The NAV per Unit of each Fund will be calculated and published and the investment portfolio of each Fund will be made available on the www.ishares.ca website on any day when there is a trading session of the TSX.

16. Upon notice given by the Filer from time to time and, in any event, not more than once quarterly, a Designated Broker will subscribe for Units in cash in an amount established by the Filer.

17. Neither the Underwriters nor the Designated Brokers will receive any fees or commissions in connection with the issuance of Units to them. Barclays Canada may, at its discretion, charge an administration fee on the issuance of Units to the Designated Brokers or Underwriters.

18. Except as described in paragraphs 12 through 17 above, Units may not be purchased directly from the Funds. Investors are generally expected to purchase Units through the facilities of the TSX. However, Units may be issued directly to Unitholders upon the reinvestment of distributions of income or capital gains.

19. Unitholders that wish to dispose of their Units may generally do so by selling their Units on the TSX, through a registered broker or dealer, subject only to customary brokerage commissions. A Unitholder that holds a Prescribed Number of Units or an integral multiple thereof of a Fund may exchange such Units with the Fund for Baskets and cash; Unitholders may also redeem their Units directly from the Funds for cash at a redemption price equal to 95% of the closing price of the Units on the TSX on the date of redemption.

20. As trustee, Barclays Canada will be entitled to receive a fee from each New iShares Fund (the Top Fund Fee). In addition, Barclays Canada or an affiliate is entitled to receive a fee for acting as trustee or manager of each iShares ETF in which the New iShares Fund will invest (the Bottom Fund Fee, and together with the Top Fund Fee, the Total Annual Fee). The Total Annual Fee will not exceed the fixed annual percentage of the NAV of each New iShares Fund that is disclosed in the Preliminary Prospectus and will be disclosed on an ongoing basis in the prospectus for the New iShares Funds. Each New iShares Fund will also pay certain other fees and expenses that are disclosed in the Preliminary Prospectus and will be disclosed on an ongoing basis in the prospectus for the New iShares Funds. It is expected that the arrangements with respect to the payment of fees and expenses by other Funds will be similar.

21. No investment dealers will act as principal distributors for the Funds in connection with the distribution of Units. The Underwriters will not receive any commission or other payment from the Funds or the Filer for distributing Units. As a result, the Filer expects to be the only entity desiring to foster market awareness and promote trading in the Units through the dissemination of sales communications. Because the Underwriters will not receive any remuneration for distributing Units, and because the Underwriters will change from time to time, it is not practical to require an Underwriters' certificate in the prospectus of the Funds.

22. Unitholders will have the right to vote at a meeting of Unitholders in respect of a Fund in certain circumstances including prior to any change in the fundamental investment objectives of the Fund, any change to their voting rights and prior to any increase in the amount of fees payable by the Fund.

23. Although Units will trade on the TSX and the acquisition of Units can therefore be subject to the Take-Over Bid Requirements:

(a) it will not be possible for one or more Unitholders to exercise control or direction over a Fund as the declaration of trust of the Funds will ensure that there can be no changes made to the Fund which do not have the support of Barclays Canada;

(b) it will be difficult for purchasers of Units to monitor compliance with Take-Over Bid Requirements because the number of outstanding Units will always be in flux as a result of the ongoing issuance and redemption of Units by the Funds; and

(c) the way in which Units will be priced deters anyone from either seeking to acquire control of, or offering to pay a control premium for, outstanding Units because Unit pricing will generally reflect the NAV of the Funds.

24. The application of the Take-Over Bid Requirements to the Funds would have an adverse impact upon Unit liquidity because it could cause Designated Brokers and other large Unitholders to cease trading Units once prescribed take-over bid thresholds are reached. This, in turn, could serve to provide conventional mutual funds with a competitive advantage over the Funds.

Decision

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.

The decision of the principal regulator under the Legislation is that the Exemption Sought is granted such that:

1. the dealer registration requirement of the Legislation does not apply to Barclays Canada in connection with its dissemination of sales communications relating to the distribution of Units, provided Barclays Canada complies with Part 15 of NI 81-102;

2. in connection with the distribution of Units pursuant to a prospectus or any renewal prospectus, the Fund is exempt from the requirement of the Legislation that the prospectus or renewal prospectus contain a certificate of the Underwriters; and

3. the purchase of Units by a person or company (a Unit Purchaser) in the normal course through the facilities of the TSX is exempt from the Take-Over Bid Requirements for so long as the Funds remain ETFs provided that, prior to making any take-over bid for Units that is not otherwise exempt from the Take-Over Bid Requirements, the Unit Purchaser, and any person or company acting jointly or in concert with the Unit Purchaser (a Concert Party), provide Barclays Canada, as trustee and manager of the Funds, with an undertaking not to exercise any votes attached to the Units held by the Unit Purchaser and any Concert Party which represent more than 20% of the votes attached to all outstanding Units.