U.S., regulates market participants and has established rules designed to prevent market
manipulation, abusive trade practices and fraud.
The Exchange states that TOCOM has authority to perform financial and operational
surveillance on its members’ trading activities, scrutinize positions held by members and large-
scale customers, and monitor price movements of futures markets by comparing them with cash
and other derivative markets’ prices.
Creation and Redemption Process
Issuances of Silver Shares will be made only in baskets of 50,000 shares or multiples
thereof (the “Basket Aggregations” or “Baskets”).24 The Trust will issue and redeem Basket
Aggregations on a continuous basis, by or through registered broker-dealers that have entered
into participant agreements (each, an “Authorized Participant”)25 with the Sponsor and the
Trustee, Bank of New York (“BNY”).26 Following issuance, the Shares will be traded on the
Exchange similar to other equity securities, such as shares of the iShares COMEX Gold Trust
and the streetTRACKS Gold Trust.27
Initially, each Share represents 10 ounces of silver. Telephone conference between Jeffrey Burns, Associate General Counsel, Amex, and Florence Harmon, Senior Special Counsel, Division of Market Regulation, Commission, on January 13, 2006.
An “Authorized Participant” is a person, who at the time of submitting to the Trustee an order to create or redeem one or more Baskets, (i) is a registered broker-dealer, (ii) is a Depository Trust Company (“DTC”) Participant or an Indirect Participant, and (iii) has in effect a valid Authorized Participant Agreement.
BNY will charge a transaction fee in connection with the redemption and/or creation of Baskets. In addition, Barclays Capital, Inc., the Initial Purchaser, will purchase 150,000 shares of the Trust that compose the initial Baskets.
See supra notes 8 and 11.