extraordinary expenses or liabilities not assumed by the Sponsor. BNY will determine the
Basket Silver Amount for a given business day by subtracting the daily expense accrual from the
previous day’s total ounces of silver in the Trust and then dividing by the number of Baskets
outstanding. Fractions of an ounce of silver smaller than .001 will be disregarded.
The creation/redemption process in connection with the Silver Shares is an in-kind
exchange of silver for Shares, rather than an exchange of silver for cash. Except for the accrual
of the Sponsor’s fee or extraordinary expenses or liabilities, the process is based entirely on the
delivery of silver in exchange for Shares. Thus, throughout each business day, the Exchange
states that the actual number of ounces required for the Basket Silver Amount usually will not
change even though the value of the Basket Silver Amount may change based on the market
price of silver.
Determination of NAV, Basket Silver Amount, and Indicative Basket Amount
Shortly after 4:00 p.m. (ET) each business day, the BNY will determine the NAV of the
Trust, utilizing that day’s announced London silver fix price (unless the Sponsor, in consultation
with the Trustee, determines that an alternative publicly available pricing benchmark more fairly
represents the commercial value of the silver held by the Trust).32 Once the value of the silver is
Florence Harmon, Senior Special Counsel, Division of Market Regulation, Commission, on January 13, 2006.
In Amendment No. 1, Amex clarified that if there is no London silver fix price on that day, the BNY will use the most recently announced London silver fix price unless the BNY, in consultation, with the Sponsor (Barclays), determines such London silver fix price to be inappropriate.
Barclays, in consultation with the BNY, may determine that an alternative publicly available pricing benchmark more fairly represents the commercial value of silver held by the Trust. In the case of a temporary disruption of the London silver fix price, the Exchange believes that it is unnecessary for a filing pursuant to Section 19(b) under the