Barclays Global Investors Canada Limited et al.

Headnote

NP 11-203 -- Exemptive relief granted to ETF offered in continuous distribution from certain mutual fund requirements and restrictions on: transmission of purchase or redemption orders, issuing units for cash or securities, calculation and payment of redemptions, date of record for payment of distributions and prohibited representations -- National Instrument 81-102 Mutual Funds.

Applicable Legislative Provisions

National Instrument 81-102 Mutual Funds, ss. 9.1, 9.4(2), 10.2, 10.3, 14.1, 15.13(1), 19.1.

November 7, 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,

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 the following sections of National Instrument 81-102 -- Mutual Funds (NI 81-102) (the Exemption Sought):

1. Sections 9.1 and 10.2 to permit purchases and sales of units of the Funds (Units) on the Toronto Stock Exchange (TSX);

2. Section 9.4(2) to permit the Funds to accept a combination of cash and securities as subscription proceeds for Units;

3. Section 10.3 to permit the Funds to redeem less than the Prescribed Number of Units at a discount to their market price, as compared to their net asset value (NAV);

4. Section 14.1 to permit the Funds to establish a record date for distributions in accordance with TSX rules; and

5. Section 15.13(1) to permit the Funds to describe the Units issued by the Funds as iShares.

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 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.

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.

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

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

Underwriters means registered brokers and dealers that have entered into underwriting agreements with the Funds and that subscribe for and purchase Units, 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 and the Securities Act (Ontario), 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 separately to the securities regulatory authorities for relief from other requirements of NI 81-102 that would enable the New iShares Funds to invest in any exchange-traded fund 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 exchange-traded fund 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 exchange-traded fund.

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 Fund 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 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 on 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. 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.

22. The securities of the exchange-traded funds managed by Barclays Canada and its affiliates (collectively, Barclays Global Investors) are listed on exchanges in various countries, including Canada, the United States, the United Kingdom, Italy, France, Switzerland, Germany, Japan, Singapore and Hong Kong. In some cases, the exchange-traded funds are organized as trusts or other non-incorporated vehicles.

23. The securities issued by exchange-traded funds managed by Barclays Global Investors, including the iShares ETFs, are described as "iShares" regardless of the form of organization of the issuer.

24. Although the Funds are or will be organized as trusts, Barclays Canada intends to use the term "iShares" in connection with the Funds and the Units issued by the Funds as part of the global branding of exchange-traded funds managed by Barclays Global Investors.

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 as follows:

1. Sections 9.1 and 10.2 - to enable the purchase and sale of Units on the TSX, which precludes the transmission of purchase or redemption orders to the order receipt offices of the Funds;

2. Section 9.4(2) - to permit payment for the issuance of Units to be made partially in cash and partially in securities, provided that the acceptance of securities as payment is made in accordance with Section 9.4(2)(b);

3. Section 10.3 - to permit the redemption of less than the Prescribed Number of Units at a price equal to 95% of the closing price of the Units on the TSX on the effective date of the redemption;

4. Section 14.1 - to relieve the Funds from the requirement relating to the record date for the payment of distributions, provided that the Funds comply with applicable TSX requirements;

5. Section 15.13(1) - to permit the Funds to describe the Units as "iShares" provided that:

(a) the Units are offered under a prospectus in which it is clearly disclosed, including on the cover page, that the Funds are organized as trusts and that Unitholders of the Funds are not shareholders of a corporation;

(b) the financial statements are prepared on a basis in which it is clearly disclosed that the Funds are organized as trusts and that Unitholders of the Funds are not shareholders of a corporation; and

(c) the description of the securities issued by other exchange-traded funds (including those that are not corporations) managed by Barclays Global Investors continues to be "iShares".