As filed with the U.S. Securities and Exchange Commission on January 21, 2022
File Nos. 333-92935 and 811-09729
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 | ☒ | |||
Post-Effective Amendment No. 2,519 | ☒ |
and/or
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 | ☒ | |||
Amendment No. 2,519 | ☒ |
(Check appropriate box or boxes)
iShares Trust
(Exact Name of Registrant as Specified in Charter)
c/o BlackRock Fund Advisors
60 State Street
Boston, MA 02109
(Address of Principal Executive Office)(Zip Code)
Registrants Telephone Number, including Area Code: (415) 670-2000
The Corporation Trust Company
1209 Orange Street
Wilmington, DE 19801
(Name and Address of Agent for Service)
With Copies to:
MARGERY K. NEALE, ESQ. WILLKIE FARR & GALLAGHER LLP 787 SEVENTH AVENUE NEW YORK, NY 10019-6099 |
DEEPA DAMRE SMITH, ESQ. BLACKROCK FUND ADVISORS 400 HOWARD STREET SAN FRANCISCO, CA 94105 |
It is proposed that this filing will become effective (check appropriate box):
☐ |
Immediately upon filing pursuant to paragraph (b) |
☐ |
On (date) pursuant to paragraph (b) |
☐ |
60 days after filing pursuant to paragraph (a)(1) |
☐ |
On (date) pursuant to paragraph (a)(1) |
☒ |
75 days after filing pursuant to paragraph (a)(2) |
☐ |
On (date) pursuant to paragraph (a)(2) |
If appropriate, check the following box:
☐ |
This post-effective amendment designates a new effective date for a previously filed post-effective amendment. |
________, 2022 | |
2022 Prospectus |
• |
iShares Blockchain and
Tech ETF | ____ | ____
|
Ticker: ____ | Stock Exchange: ____ |
1 | The amount rounded to 0.00%. |
1 Year | 3 Years | |||
$__ | $__ |
■ | General Impact. This outbreak has resulted in travel restrictions, closed international borders, enhanced health screenings at ports of entry and elsewhere, disruption of, and delays in, healthcare service preparation and delivery, prolonged quarantines, cancellations, supply chain disruptions, lower consumer demand, temporary and permanent closures of stores, restaurants and other commercial establishments, layoffs, defaults and other significant economic impacts, as well as general concern and uncertainty. |
■ | Market Volatility. The outbreak has also resulted in extreme volatility, severe losses, and disruptions in markets which can adversely impact the Fund and its investments, including impairing hedging activity to the extent a Fund engages in such activity, as expected correlations between related markets or instruments may no longer apply. In addition, to the extent the Fund invests in short-term instruments that have negative yields, the Fund’s value may be impaired as a result. Certain issuers of equity securities have cancelled or announced the suspension of dividends. The outbreak has, and may continue to, negatively affect the credit ratings of some fixed-income securities and their issuers. |
■ | Market Closures. Certain local markets have been or may be subject to closures, and there can be no assurance that trading will continue in any local markets in which the Fund may invest, when any resumption of trading will occur or, once such markets resume trading, whether they will face further closures. Any suspension of trading in markets in which the Fund invests will have an impact on the Fund and its investments and will impact the Fund’s ability to purchase or sell securities in such markets. |
■ | Operational Risk. The outbreak could also impair the information technology and other operational systems upon which the Fund’s service providers, including BFA, rely, and could otherwise disrupt the ability of employees of the Fund's service providers to perform critical tasks relating to the Fund, for example, due to the service providers’ employees performing tasks in alternate locations than under normal operating conditions or the illness of certain employees of the Fund's service providers. |
■ | Governmental Interventions. Governmental and quasi-governmental authorities and regulators throughout the world have responded to the outbreak and the resulting economic disruptions with a variety of fiscal and monetary policy changes, including direct capital infusions into companies and other issuers, new monetary policy tools, and lower interest rates. An unexpected or sudden reversal of these policies, or the ineffectiveness of such policies, is likely to increase market volatility, which could adversely affect the Fund’s investments. |
■ | Pre-Existing Conditions. Public health crises caused by the outbreak may exacerbate other pre-existing political, social and economic risks in certain countries or globally, |
which could adversely affect the Fund and its investments and could result in increased premiums or discounts to the Fund's NAV. |
■ | Government intervention in issuers' operations or structure; |
■ | A lack of market liquidity and market efficiency; |
■ | Greater securities price volatility; |
■ | Exchange rate fluctuations and exchange controls; |
■ | Less availability of public information about issuers; |
■ | Limitations on foreign ownership of securities; |
■ | Imposition of withholding or other taxes; |
■ | Imposition of restrictions on the expatriation of the funds or other assets of the Fund; |
■ | Higher transaction and custody costs and delays in settlement procedures; |
■ | Difficulties in enforcing contractual obligations; |
■ | Lower levels of regulation of the securities markets; |
■ | Weaker accounting, disclosure and reporting requirements and the risk of being delisted from U.S. exchanges; and |
■ | Legal principles relating to corporate governance, directors’ fiduciary duties and liabilities and stockholders’ rights in markets in which the Fund invests may differ from or may not be as extensive or protective as those that apply in the U.S. |
Call: |
1-800-iShares
or 1-800-474-2737 (toll free)
Monday through Friday, 8:30 a.m. to 6:30 p.m. (Eastern time) |
Email: | iSharesETFs@blackrock.com |
Write: |
c/o
BlackRock Investments, LLC
1 University Square Drive, Princeton, NJ 08540 |
Fund | Ticker | Listing Exchange | ||
iShares Blockchain and Tech ETF (the “Fund”) | ____ | ____ |
• | Communications of Data Files: The Fund may make available through the facilities of the National Securities Clearing Corporation (“NSCC”) or through posting on the www.iShares.com, prior to the opening of trading on each business day, a list of the Fund’s holdings (generally pro-rata) that Authorized Participants could deliver to the Fund to settle purchases of the Fund (i.e. Deposit Securities) or that Authorized Participants would receive from the Fund to settle redemptions of the Fund (i.e. Fund Securities). These files are known as the Portfolio Composition File and the Fund Data File (collectively, “Files”). The Files are applicable for the next trading day and are provided to the NSCC and/or posted on www.iShares.com after the close of markets in the U.S. |
• | Communications with Authorized Participants and Liquidity Providers: Certain employees of BFA are responsible for interacting with Authorized Participants and liquidity providers with respect to discussing custom basket proposals as described in the Custom Baskets section of this SAI. As part of these discussions, these employees may discuss with an Authorized Participant or liquidity provider the securities the Fund is willing to accept for a creation, and securities that the Fund will provide on a redemption. |
• | Communications with Listing Exchanges: From time to time, employees of BFA may discuss portfolio holdings information with the applicable primary listing exchange for the Fund as needed to meet the exchange listing standards. |
• | Communications with Other Portfolio Managers: Certain information may be provided to employees of BFA who manage funds that invest a significant percentage of their assets in shares of an underlying fund as necessary to manage the fund’s investment objective and strategy. |
• | Communication of Other Information: Certain explanatory information regarding the Files is released to Authorized Participants and liquidity providers on a daily basis, but is only done so after the Files are posted to www.iShares.com. |
• | Third-Party Service Providers: Certain portfolio holdings information may be disclosed to Fund Trustees and their counsel, outside counsel for the Fund, auditors and to certain third-party service providers (i.e., fund administrator, custodian, proxy voting service) for which a non-disclosure, confidentiality agreement or other obligation is in place with such service providers, as may be necessary to conduct business in the ordinary course in a manner consistent with applicable policies, agreements with the Fund, the terms of the current registration statements and federal securities laws and regulations thereunder. |
• | Liquidity Metrics: “Liquidity Metrics,” which seek to ascertain the Fund’s liquidity profile under BlackRock’s global liquidity risk methodology, include but are not limited to: (a) disclosure regarding the number of days needed to liquidate a portfolio or the portfolio’s underlying investments; and (b) the percentage of the Fund’s NAV invested in a particular liquidity tier under BlackRock’s global liquidity risk methodology. The dissemination of position-level liquidity metrics data and any non-public regulatory data pursuant to the Liquidity Rule (including SEC liquidity tiering) is not permitted unless pre-approved. Disclosure of portfolio-level liquidity metrics prior to 60 calendar days after calendar quarter-end requires a non-disclosure or confidentiality agreement and approval of the Trust’s Chief Compliance Officer. Portfolio-level liquidity metrics disclosure subsequent to 60 calendar days after calendar quarter-end requires the approval of portfolio management and must be disclosed to all parties requesting the information if disclosed to any party. |
• | Companies must be primarily listed in one of the following 43 countries: Australia, Austria, Belgium, Brazil, Canada, Chile, China, Colombia, Czech Republic, Denmark, Egypt, Finland, France, Germany, Greece, Hong Kong, Hungary, Iceland, Indonesia, Ireland, Israel, Italy, Japan, Malaysia, Mexico, Netherlands, New Zealand, Norway, Peru, Philippines, Poland, Portugal, Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, U.K., and United States; |
• | The Underlying Index will include China A shares; |
• | The companies initially included in the Underlying Index or new to the Underlying Index must have a float-adjusted market capitalization of $100 million or greater and three-month ADTV of $1 million or greater; and |
• | Existing constituents are not removed from the Underlying Index unless their float-adjusted market capitalization is less than $75 million, and three month ADTV is less than $0.75 million. |
1. | Concentrate its investments in a particular industry, as that term is used in the Investment Company Act, except that the Fund will concentrate to approximately the same extent that its Underlying Index concentrates in the securities of a particular industry or group of industries. |
2. | Borrow money, except as permitted under the Investment Company Act. |
3. | Issue senior securities to the extent such issuance would violate the Investment Company Act. |
4. | Purchase or hold real estate, except the Fund may purchase and hold securities or other instruments that are secured by, or linked to, real estate or interests therein, securities of REITs, mortgage-related securities and securities of issuers engaged in the real estate business, and the Fund may purchase and hold real estate as a result of the ownership of securities or other instruments. |
5. | Underwrite securities issued by others, except to the extent that the sale of portfolio securities by the Fund may be deemed to be an underwriting or as otherwise permitted by applicable law. |
6. | Purchase or sell commodities or commodity contracts, except as permitted by the Investment Company Act. |
7. | Make loans to the extent prohibited by the Investment Company Act. |
Name (Age) | Position |
Principal
Occupation(s)
During the Past 5 Years |
Other
Directorships
Held by Trustee |
|||
Robert
S. Kapito1
(64) |
Trustee
(since 2009). |
President, BlackRock, Inc. (since 2006); Vice Chairman of BlackRock, Inc. and Head of BlackRock’s Portfolio Management Group (since its formation in 1998) and BlackRock, Inc.’s predecessor entities (since 1988); Trustee, University of Pennsylvania (since 2009); President of Board of Directors, Hope & Heroes Children’s Cancer Fund (since 2002). | Director of BlackRock, Inc. (since 2006); Director of iShares, Inc. (since 2009); Trustee of iShares U.S. ETF Trust (since 2011). | |||
Salim
Ramji2
(51) |
Trustee (since 2019). | Senior Managing Director, BlackRock, Inc. (since 2014); Global Head of BlackRock’s ETF and Index Investments Business (since 2019); Head of BlackRock’s U.S. Wealth Advisory Business (2015-2019); Global Head of Corporate Strategy, BlackRock, Inc. (2014-2015); Senior Partner, McKinsey & Company (2010-2014). | Director of iShares, Inc. (since 2019); Trustee of iShares U.S. ETF Trust (since 2019). |
1 | Robert S. Kapito is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust due to his affiliations with BlackRock, Inc. and its affiliates. |
2 | Salim Ramji is deemed to be an “interested person” (as defined in the 1940 Act) of the Trust due to his affiliations with BlackRock, Inc. and its affiliates. |
Name (Age) | Position |
Principal
Occupation(s)
During the Past 5 Years |
Other
Directorships
Held by Trustee |
|||
John
E. Kerrigan
(66) |
Trustee
(since 2005); Independent Board Chair (since 2022). |
Chief Investment Officer, Santa Clara University (since 2002). | Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011); Independent Board Chair of iShares, Inc. and iShares U.S. ETF Trust (since 2022). | |||
Jane
D. Carlin
(65) |
Trustee
(since 2015); Risk Committee Chair (since 2016). |
Consultant (since 2012); Member of the Audit Committee (2012-2018), Chair of the Nominating and Governance Committee (2017-2018) and Director of PHH Corporation (mortgage solutions) (2012-2018); Managing Director and Global Head of Financial Holding Company Governance & Assurance and the Global Head of Operational Risk Management of Morgan Stanley (2006-2012). | Director of iShares, Inc. (since 2015); Trustee of iShares U.S. ETF Trust (since 2015); Member of the Audit Committee (since 2016), Chair of the Audit Committee (since 2020) and Director of The Hanover Insurance Group, Inc. (since 2016). | |||
Richard
L. Fagnani
(67) |
Trustee
(since 2017); Audit Committee Chair (since 2019). |
Partner, KPMG LLP (2002-2016). | Director of iShares, Inc. (since 2017); Trustee of iShares U.S. ETF Trust (since 2017). | |||
Cecilia
H. Herbert
(72) |
Trustee
(since 2005); Nominating and Governance and Equity Plus Committee Chairs (since 2022). |
Chair of the Finance Committee (since 2019) and Trustee and Member of the Finance, Audit and Quality Committees of Stanford Health Care (since 2016); Trustee of WNET, New York's public media company (since 2011) and Member of the Audit Committee (since 2018) and Investment Committee (since 2011); Chair (1994-2005) and Member (since 1992) of the Investment Committee, Archdiocese of San Francisco; Trustee of Forward Funds (14 portfolios) (2009-2018); Trustee of Salient MF Trust (4 portfolios) (2015-2018); Director (1998-2013) and President (2007-2011) of the Board of Directors, Catholic Charities CYO; Trustee (2002-2011) and Chair of the Finance and Investment Committee (2006-2010) of the Thacher School; Director of the Senior Center of Jackson Hole (since 2020). | Director of iShares, Inc. (since 2005); Trustee of iShares U.S. ETF Trust (since 2011); Trustee of Thrivent Church Loan and Income Fund (since 2019). |
Name (Age) | Position |
Principal
Occupation(s)
During the Past 5 Years |
Other
Directorships
Held by Trustee |
|||
Drew
E. Lawton
(62) |
Trustee
(since 2017); 15(c) Committee Chair (since 2017). |
Senior Managing Director of New York Life Insurance Company (2010-2015). | Director of iShares, Inc. (since 2017); Trustee of iShares U.S. ETF Trust (since 2017). | |||
John
E. Martinez
(60) |
Trustee
(since 2003); Securities Lending Committee Chair (since 2019). |
Director of Real Estate Equity Exchange, Inc. (since 2005); Director of Cloudera Foundation (2017-2020); and Director of Reading Partners (2012-2016). | Director of iShares, Inc. (since 2003); Trustee of iShares U.S. ETF Trust (since 2011). | |||
Madhav
V. Rajan
(57) |
Trustee
(since 2011); Fixed Income Plus Committee Chair (since 2019). |
Dean, and George Pratt Shultz Professor of Accounting, University of Chicago Booth School of Business (since 2017); Advisory Board Member (since 2016) and Director (since 2020) of C.M. Capital Corporation; Chair of the Board for the Center for Research in Security Prices, LLC (since 2020); Robert K. Jaedicke Professor of Accounting, Stanford University Graduate School of Business (2001-2017); Professor of Law (by courtesy), Stanford Law School (2005-2017); Senior Associate Dean for Academic Affairs and Head of MBA Program, Stanford University Graduate School of Business (2010-2016). |
Director
of iShares, Inc. (since 2011);
Trustee of iShares U.S. ETF Trust (since 2011). |
Name (Age) | Position |
Principal
Occupation(s)
During the Past 5 Years |
||
Armando
Senra
(50) |
President (since 2019). | Managing Director, BlackRock, Inc. (since 2007); Head of U.S., Canada and Latam iShares, BlackRock, Inc. (since 2019); Head of Latin America Region, BlackRock, Inc. (2006-2019); Managing Director, Bank of America Merrill Lynch (1994-2006). |
Name (Age) | Position |
Principal
Occupation(s)
During the Past 5 Years |
||
Trent
Walker
(47) |
Treasurer
and Chief Financial Officer
(since 2020). |
Managing Director of BlackRock, Inc. (since September 2019); Chief Financial Officer of iShares Delaware Trust Sponsor LLC, BlackRock Funds, BlackRock Funds II, BlackRock Funds IV, BlackRock Funds V and BlackRock Funds VI (since 2021); Executive Vice President of PIMCO (2016-2019); Senior Vice President of PIMCO (2008-2015); Treasurer (2013-2019) and Assistant Treasurer (2007-2017) of PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series, PIMCO Equity Series VIT, PIMCO Managed Accounts Trust, 2 PIMCO-sponsored interval funds and 21 PIMCO-sponsored closed-end funds. | ||
Charles
Park
(54) |
Chief Compliance Officer (since 2006). | Chief Compliance Officer of BlackRock Advisors, LLC and the BlackRock-advised Funds in the BlackRock Multi-Asset Complex and the BlackRock Fixed-Income Complex (since 2014); Chief Compliance Officer of BFA (since 2006). | ||
Deepa
Damre Smith
(46) |
Secretary (since 2019). | Managing Director, BlackRock, Inc. (since 2014); Director, BlackRock, Inc. (2009-2013). | ||
Scott
Radell
(53) |
Executive
Vice President
(since 2012). |
Managing Director, BlackRock, Inc. (since 2009); Head of Portfolio Solutions, BlackRock, Inc. (since 2009). | ||
Alan
Mason
(61) |
Executive
Vice President
(since 2016). |
Managing Director, BlackRock, Inc. (since 2009). | ||
Marybeth
Leithead
(59) |
Executive
Vice President
(since 2019). |
Managing Director, BlackRock, Inc. (since 2017); Chief Operating Officer of Americas iShares (since 2017); Portfolio Manager, Municipal Institutional & Wealth Management (2009-2016). |
Name | Fund |
Dollar
Range of Equity
Securities in Named Fund |
Aggregate
Dollar Range
of Equity Securities in all Registered Investment Companies Overseen by Trustee in Family of Investment Companies |
|||
Robert S. Kapito | None | None | None | |||
Salim Ramji | iShares Broad USD Investment Grade Corporate Bond ETF | $10,001-$50,000 | Over $100,000 | |||
iShares Commodity Curve Carry Strategy ETF | $50,001-$100,000 | |||||
iShares Core MSCI Emerging Markets ETF | Over $100,000 | |||||
iShares Core MSCI Total International Stock ETF | $1-$10,000 | |||||
iShares Core S&P 500 ETF | $1-$10,000 | |||||
iShares Core S&P Mid-Cap ETF | Over $100,000 | |||||
iShares Core S&P Small-Cap ETF | $50,001-$100,000 | |||||
iShares Core S&P Total U.S. Stock Market ETF | $1-$10,000 | |||||
iShares Expanded Tech Sector ETF | $1-$10,000 | |||||
iShares Expanded Tech-Software Sector ETF | $1-$10,000 | |||||
iShares GSCI Commodity Dynamic Roll Strategy ETF | $10,001-$50,000 | |||||
iShares MSCI USA ESG Select ETF | $1-$10,000 |
Name | Fund |
Dollar
Range of Equity
Securities in Named Fund |
Aggregate
Dollar Range
of Equity Securities in all Registered Investment Companies Overseen by Trustee in Family of Investment Companies |
|||
iShares Robotics and Artificial Intelligence Multisector ETF | $1-$10,000 | |||||
iShares TIPS Bond ETF | $10,001-$50,000 | |||||
John E. Kerrigan | iShares Core MSCI EAFE ETF | $10,001-$50,000 | Over $100,000 | |||
iShares Core S&P 500 ETF | Over $100,000 | |||||
iShares Core S&P Small-Cap ETF | $10,001-$50,000 | |||||
iShares ESG Advanced MSCI EAFE ETF | $1-$10,000 | |||||
iShares ESG Advanced MSCI USA ETF | $1-$10,000 | |||||
iShares ESG Aware MSCI EAFE ETF | $10,001-$50,000 | |||||
iShares ESG Aware MSCI EM ETF | Over $100,000 | |||||
iShares ESG Aware MSCI USA ETF | Over $100,000 | |||||
iShares ESG Aware MSCI USA Small-Cap ETF | $1-$10,000 | |||||
iShares Global Clean Energy ETF | Over $100,000 | |||||
iShares Global Infrastructure ETF | Over $100,000 | |||||
iShares Global Tech ETF | $50,001-$100,000 | |||||
iShares MSCI ACWI ex U.S. ETF | Over $100,000 | |||||
iShares MSCI EAFE Growth ETF | Over $100,000 | |||||
iShares MSCI KLD 400 Social ETF | $10,001-$50,000 | |||||
iShares MSCI USA ESG Select ETF | $1-$10,000 | |||||
iShares MSCI USA Min Vol Factor ETF | $10,001-$50,000 | |||||
iShares MSCI USA Quality Factor ETF | $10,001-$50,000 | |||||
iShares MSCI USA Value Factor ETF | $50,001-$100,000 | |||||
iShares U.S. Medical Devices ETF | $10,001-$50,000 | |||||
Jane D. Carlin | iShares Core MSCI EAFE ETF | Over $100,000 | Over $100,000 | |||
iShares Core MSCI Emerging Markets ETF | $10,001-$50,000 | |||||
iShares Core S&P Mid-Cap ETF | $10,001-$50,000 | |||||
iShares Core S&P Small-Cap ETF | Over $100,000 | |||||
iShares Core U.S. Aggregate Bond ETF | $50,001-$100,000 | |||||
iShares Global Tech ETF | $50,001-$100,000 | |||||
iShares iBoxx $ High Yield Corporate Bond ETF | Over $100,000 | |||||
iShares MSCI ACWI ETF | Over $100,000 | |||||
iShares MSCI ACWI ex U.S. ETF | Over $100,000 | |||||
iShares MSCI EAFE Small-Cap ETF | $10,001-$50,000 | |||||
iShares MSCI Emerging Markets Small-Cap ETF | $10,001-$50,000 | |||||
iShares MSCI USA Min Vol Factor ETF | $50,001-$100,000 |
Name | Fund |
Dollar
Range of Equity
Securities in Named Fund |
Aggregate
Dollar Range
of Equity Securities in all Registered Investment Companies Overseen by Trustee in Family of Investment Companies |
|||
iShares Select Dividend ETF | $10,001-$50,000 | |||||
Richard L. Fagnani | iShares Core Dividend Growth ETF | $10,001-$50,000 | Over $100,000 | |||
iShares Core MSCI EAFE ETF | $10,001-$50,000 | |||||
iShares Exponential Technologies ETF | $10,001-$50,000 | |||||
iShares Global Clean Energy ETF | $10,001-$50,000 | |||||
iShares MBS ETF | $10,001-$50,000 | |||||
iShares MSCI All Country Asia ex Japan ETF | $10,001-$50,000 | |||||
iShares MSCI EAFE Value ETF | $10,001-$50,000 | |||||
iShares MSCI Emerging Markets Multifactor ETF | $10,001-$50,000 | |||||
iShares MSCI Emerging Markets Small-Cap ETF | $10,001-$50,000 | |||||
iShares MSCI Japan ETF | $10,001-$50,000 | |||||
iShares MSCI Singapore ETF | $10,001-$50,000 | |||||
iShares MSCI USA Equal Weighted ETF | $10,001-$50,000 | |||||
iShares MSCI USA Quality Factor ETF | $10,001-$50,000 | |||||
iShares Robotics and Artificial Intelligence Multisector ETF | $10,001-$50,000 | |||||
iShares U.S. Infrastructure ETF | $10,001-$50,000 | |||||
Cecilia H. Herbert | iShares California Muni Bond ETF | $10,001-$50,000 | Over $100,000 | |||
iShares Core Dividend Growth ETF | $50,001-$100,000 | |||||
iShares Core MSCI Emerging Markets ETF | $1-$10,000 | |||||
iShares Core MSCI Total International Stock ETF | $10,001-$50,000 | |||||
iShares Core S&P 500 ETF | Over $100,000 | |||||
iShares Core S&P U.S. Growth ETF | Over $100,000 | |||||
iShares Core S&P U.S. Value ETF | Over $100,000 | |||||
iShares iBoxx $ High Yield Corporate Bond ETF | $10,001-$50,000 | |||||
iShares International Select Dividend ETF | $50,001-$100,000 | |||||
iShares MSCI EAFE ETF | $1-$10,000 | |||||
iShares MSCI Japan ETF | $10,001-$50,000 | |||||
iShares MSCI USA Value Factor ETF | Over $100,000 | |||||
iShares National Muni Bond ETF | $10,001-$50,000 | |||||
iShares Preferred and Income Securities ETF | $10,001-$50,000 | |||||
Drew E. Lawton | BlackRock Short Maturity Bond ETF | Over $100,000 | Over $100,000 | |||
BlackRock Ultra Short-Term Bond ETF | Over $100,000 | |||||
iShares 0-5 Year High Yield Corporate Bond ETF | $50,001-$100,000 |
Name | Fund |
Dollar
Range of Equity
Securities in Named Fund |
Aggregate
Dollar Range
of Equity Securities in all Registered Investment Companies Overseen by Trustee in Family of Investment Companies |
|||
iShares Biotechnology ETF | $50,001-$100,000 | |||||
iShares Core Dividend Growth ETF | Over $100,000 | |||||
iShares Core MSCI Total International Stock ETF | Over $100,000 | |||||
iShares Core S&P Total U.S. Stock Market ETF | Over $100,000 | |||||
iShares Expanded Tech Sector ETF | Over $100,000 | |||||
iShares Exponential Technologies ETF | Over $100,000 | |||||
John E. Martinez | iShares 1-5 Year Investment Grade Corporate Bond ETF | Over $100,000 | Over $100,000 | |||
iShares Core 5-10 Year USD Bond ETF | Over $100,000 | |||||
iShares Core International Aggregate Bond ETF | Over $100,000 | |||||
iShares Core MSCI International Developed Markets ETF | $10,001-$50,000 | |||||
iShares Global Consumer Staples ETF | Over $100,000 | |||||
iShares Russell 1000 ETF | Over $100,000 | |||||
iShares Russell 1000 Value ETF | Over $100,000 | |||||
iShares Russell 2000 ETF | Over $100,000 | |||||
Madhav V. Rajan | BlackRock Short Maturity Bond ETF | Over $100,000 | Over $100,000 | |||
iShares Broad USD High Yield Corporate Bond ETF | Over $100,000 | |||||
iShares Mortgage Real Estate ETF | Over $100,000 | |||||
iShares Preferred and Income Securities ETF | Over $100,000 |
Name |
iShares
Blockchain
and Tech ETF |
Pension
or
Retirement Benefits Accrued As Part of Trust Expenses1 |
Estimated
Annual
Benefits Upon Retirement1 |
Total
Compensation From the Fund and Fund Complex2 |
||||
Independent Trustees: | ||||||||
Jane D. Carlin | $__ | Not Applicable | Not Applicable | $420,000 | ||||
Richard L. Fagnani | __ | Not Applicable | Not Applicable | 446,764 | ||||
Cecilia H. Herbert | __ | Not Applicable | Not Applicable | 475,000 | ||||
John E. Kerrigan | __ | Not Applicable | Not Applicable | 445,000 | ||||
Drew E. Lawton | __ | Not Applicable | Not Applicable | 431,764 | ||||
John E. Martinez | __ | Not Applicable | Not Applicable | 420,000 | ||||
Madhav V. Rajan | __ | Not Applicable | Not Applicable | 420,000 | ||||
Interested Trustees: | ||||||||
Robert S. Kapito | $__ | Not Applicable | Not Applicable | $0 | ||||
Salim Ramji | __ | Not Applicable | Not Applicable | 0 |
1 | No Trustee or officer is entitled to any pension or retirement benefits from the Trust. |
2 | Also includes compensation for service on the Board of Trustees of iShares U.S. ETF Trust and the Board of Directors of iShares, Inc. |
Jennifer Hsui | ||||
Types of Accounts | Number | Total Assets | ||
Registered Investment Companies | __ | $__ | ||
Other Pooled Investment Vehicles | __ | __ | ||
Other Accounts | __ | __ |
Greg Savage | ||||
Types of Accounts | Number | Total Assets | ||
Registered Investment Companies | __ | $__ | ||
Other Pooled Investment Vehicles | __ | __ | ||
Other Accounts | __ | __ |
Paul Whitehead | ||||
Types of Accounts | Number | Total Assets | ||
Registered Investment Companies | __ | $__ | ||
Other Pooled Investment Vehicles | __ | __ | ||
Other Accounts | __ | __ |
Amy Whitelaw | ||||
Types of Accounts | Number | Total Assets | ||
Registered Investment Companies | __ | $__ | ||
Other Pooled Investment Vehicles | __ | __ | ||
Other Accounts | __ | __ |
Jennifer Hsui | ||||
Types of Accounts |
Number
of Other Accounts
with Performance Fees Managed by Portfolio Manager |
Aggregate
of Total Assets |
||
Registered Investment Companies | __ | $__ | ||
Other Pooled Investment Vehicles | __ | __ | ||
Other Accounts | __ | __ |
Greg Savage | ||||
Types of Accounts |
Number
of Other Accounts
with Performance Fees Managed by Portfolio Manager |
Aggregate
of Total Assets |
||
Registered Investment Companies | __ | $__ | ||
Other Pooled Investment Vehicles | __ | __ | ||
Other Accounts | __ | __ |
Paul Whitehead | ||||
Types of Accounts |
Number
of Other Accounts
with Performance Fees Managed by Portfolio Manager |
Aggregate
of Total Assets |
||
Registered Investment Companies | __ | $__ | ||
Other Pooled Investment Vehicles | __ | __ | ||
Other Accounts | __ | __ |
Amy Whitelaw | ||||
Types of Accounts |
Number
of Other Accounts
with Performance Fees Managed by Portfolio Manager |
Aggregate
of Total Assets |
||
Registered Investment Companies | __ | $__ | ||
Other Pooled Investment Vehicles | __ | __ | ||
Other Accounts | __ | __ |
Shares
Per
Creation Unit |
Approximate
Value Per Creation Unit (U.S.$) |
|
__ | $____ |
Standard
Creation
Transaction Fee |
Maximum
Additional
Charge* |
|
$__ | __% |
* | As a percentage of the net asset value per Creation Unit. |
Standard
Redemption
Transaction Fee |
Maximum
Additional
Charge* |
|
$__ | __% |
* | As a percentage of the net asset value per Creation Unit, inclusive of the standard redemption transaction fee. |
• | Boards and directors |
• | Auditors and audit-related issues |
• | Capital structure, mergers, asset sales and other special transactions |
• | Compensation and benefits |
• | Environmental and social issues |
• | General corporate governance matters and shareholder protections |
• | establishing an appropriate corporate governance structure |
• | supporting and overseeing management in setting long-term strategic goals, applicable measures of value-creation and milestones that will demonstrate progress, and steps taken if any obstacles are anticipated or incurred |
• | ensuring the integrity of financial statements |
• | making independent decisions regarding mergers, acquisitions and disposals |
• | establishing appropriate executive compensation structures |
• | addressing business issues, including environmental and social issues, when they have the potential to materially impact company reputation and performance |
• | current or former employment at the company or a subsidiary within the past several years |
• | being, or representing, a shareholder with a substantial shareholding in the company |
• | interlocking directorships |
• | having any other interest, business or other relationship which could, or could reasonably be perceived to, materially interfere with the director’s ability to act in the best interests of the company |
1) | publish a disclosure in line with industry-specific SASB guidelines by year-end, if they have not already done so, or disclose a similar set of data in a way that is relevant to their particular business; and |
2) | disclose climate-related risks in line with the TCFD’s recommendations, if they have not already done so. This should include the company’s plan for operating under a scenario where the Paris Agreement’s goal of limiting global warming to less than two degrees is fully realized, as expressed by the TCFD guidelines. |
• | The company has already taken sufficient steps to address the concern |
• | The company is in the process of actively implementing a response |
• | There is a clear and material economic disadvantage to the company in the near-term if the issue is not addressed in the manner requested by the shareholder proposal |
• | BlackRock clients who may be issuers of securities or proponents of shareholder resolutions |
• | BlackRock business partners or third parties who may be issuers of securities or proponents of shareholder resolutions |
• | BlackRock employees who may sit on the boards of public companies held in Funds managed by BlackRock |
• | Significant BlackRock, Inc. investors who may be issuers of securities held in Funds managed by BlackRock |
• | Securities of BlackRock, Inc. or BlackRock investment funds held in Funds managed by BlackRock |
• | BlackRock, Inc. board members who serve as senior executives of public companies held in Funds managed by BlackRock |
• | Adopted the Guidelines which are designed to protect and enhance the economic value of the companies in which BlackRock invests on behalf of clients. |
• | Established a reporting structure that separates BIS from employees with sales, vendor management or business partnership roles. In addition, BlackRock seeks to ensure that all engagements with corporate issuers, dissident shareholders or shareholder proponents are managed consistently and without regard to BlackRock’s relationship with such parties. Clients or business partners are not given special treatment or differentiated access to BIS. BIS prioritizes engagements based on factors including but not limited to our need for additional information to make a voting decision or our view on the likelihood that an engagement could lead to positive outcome(s) over time for the economic value of the company. Within the normal course of business, BIS may engage directly with BlackRock clients, business partners and/or third parties, and/or with employees with sales, vendor management or business partnership roles, in discussions regarding our approach to stewardship, general corporate governance matters, client reporting needs, and/or to otherwise ensure that proxy-related client service levels are met. |
• | Determined to engage, in certain instances, an independent fiduciary to vote proxies as a further safeguard to avoid potential conflicts of interest, to satisfy regulatory compliance requirements, or as may be otherwise required by applicable law. In such circumstances, the independent fiduciary provides BlackRock’s proxy voting agent with instructions, in accordance with the Guidelines, as to how to vote such proxies, and BlackRock’s proxy voting agent votes the proxy in accordance with the independent fiduciary’s determination. BlackRock uses an independent fiduciary to vote proxies of (i) any company that is affiliated with BlackRock, Inc., (ii) any public company that includes BlackRock employees on its board of directors, (iii) The PNC Financial Services Group, Inc., (iv) any public company of which a BlackRock, Inc. board member serves as a senior executive, and (v) companies when legal or regulatory requirements compel BlackRock to use an independent fiduciary. In selecting an independent fiduciary, we assess several characteristics, including but not limited to: independence, an ability to analyze proxy issues and vote in the best economic interest of our clients, reputation for reliability and integrity, and operational capacity to accurately deliver the assigned votes in a timely manner. We may engage more than one independent fiduciary, in part in order to mitigate potential or perceived conflicts of interest at an independent fiduciary. The Global Committee appoints and reviews the performance of the independent fiduciar(ies), generally on an annual basis. |
Contents | |
Introduction | A-16 |
Voting guidelines | A-16 |
Boards and directors | A-16 |
- Director elections | A-16 |
- Independence | A-16 |
- Oversight | A-17 |
- Responsiveness to shareholders | A-17 |
- Shareholder rights | A-17 |
- Board composition and effectiveness | A-18 |
- Board size | A-19 |
- CEO and management succession planning | A-19 |
- Classified board of directors / staggered terms | A-19 |
- Contested director elections | A-19 |
- Cumulative voting | A-19 |
- Director compensation and equity programs | A-19 |
- Majority vote requirements | A-19 |
- Risk oversight | A-20 |
- Separation of chairman and CEO | A-20 |
Auditors and audit-related issues | A-20 |
Capital structure proposals | A-21 |
- Equal voting rights | A-21 |
- Blank check preferred stock | A-21 |
- Increase in authorized common shares | A-21 |
- Increase or issuance of preferred stock | A-21 |
- Stock splits | A-22 |
Mergers, asset sales, and other special transactions | A-22 |
- Poison pill plans | A-22 |
- Reimbursement of expenses for successful shareholder campaigns | A-22 |
Executive Compensation | A-22 |
- Advisory resolutions on executive compensation (“Say on Pay”) | A-23 |
- Advisory votes on the frequency of Say on Pay resolutions | A-23 |
- Claw back proposals | A-23 |
- Employee stock purchase plans | A-23 |
- Equity compensation plans | A-23 |
- Golden parachutes | A-23 |
- Option exchanges | A-24 |
- Pay-for-Performance plans | A-24 |
- Supplemental executive retirement plans | A-24 |
Environmental and social issues | A-24 |
- Climate risk | A-25 |
- Corporate political activities | A-26 |
General corporate governance matters | A-26 |
- Adjourn meeting to solicit additional votes | A-26 |
- Bundled proposals | A-26 |
- Exclusive forum provisions | A-26 |
- Multi-jurisdictional companies | A-26 |
- Other business | A-27 |
- Reincorporation | A-27 |
- IPO governance | A-27 |
Contents | |
Shareholder Protections | A-27 |
- Amendment to charter / articles / bylaws | A-27 |
- Proxy access | A-28 |
- Right to act by written consent | A-28 |
- Right to call a special meeting | A-28 |
- Simple majority voting | A-28 |
• | Boards and directors |
• | Auditors and audit-related issues |
• | Capital structure |
• | Mergers, asset sales, and other special transactions |
• | Executive compensation |
• | Environmental and social issues |
• | General corporate governance matters |
• | Shareholder protections |
• | Employment as a senior executive by the company or a subsidiary within the past five years |
• | An equity ownership in the company in excess of 20% |
• | Having any other interest, business, or relationship which could, or could reasonably be perceived to, materially interfere with the director’s ability to act in the best interests of the company |
• | Where the board has failed to exercise oversight with regard to accounting practices or audit oversight, we will consider voting against the current audit committee, and any other members of the board who may be responsible. For example, this may apply to members of the audit committee during a period when the board failed to facilitate quality, independent auditing if substantial accounting irregularities suggest insufficient oversight by that committee |
• | Members of the compensation committee during a period in which executive compensation appears excessive relative to performance and peers, and where we believe the compensation committee has not already substantially addressed this issue |
• | The chair of the nominating / governance committee, or where no chair exists, the nominating / governance committee member with the longest tenure, where the board is not comprised of a majority of independent directors. However, this would not apply in the case of a controlled company |
• | Where it appears the director has acted (at the company or at other companies) in a manner that compromises his / her reliability to represent the best long-term economic interests of shareholders |
• | Where a director has a pattern of poor attendance at combined board and applicable key committee meetings. Excluding exigent circumstances, BlackRock generally considers attendance at less than 75% of the combined board and applicable key committee meetings by a board member to be poor attendance |
• | Where a director serves on an excess number of boards, which may limit his / her capacity to focus on each board’s requirements. The following illustrates the maximum number of boards on which a director may serve, before he / she is considered to be over-committed: |
Public
Company CEO |
#
Outside
Public Boards* |
Total
# of
Public Boards |
|||
Director A | x | 1 | 2 | ||
Director B | 3 | 4 |
* | In addition to the company under review |
• | The independent chair or lead independent director, members of the nominating / governance committee, and / or the longest tenured director(s), where we observe a lack of board responsiveness to shareholders, evidence of board entrenchment, and / or failure to promote adequate board succession planning |
• | The chair of the nominating / governance committee, or where no chair exists, the nominating / governance committee member with the longest tenure, where board member(s) at the most recent election of directors have received withhold votes from more than 30% of shares voted and the board has not taken appropriate action to respond to shareholder concerns. This may not apply in cases where BlackRock did not support the initial withhold vote |
• | The independent chair or lead independent director and / or members of the nominating / governance committee, where a board fails to implement shareholder proposals that receive a majority of votes cast at a prior shareholder meeting, and the proposals, in our view, have a direct and substantial impact on shareholders’ fundamental rights or long-term economic interests |
• | The independent chair or lead independent director and members of the governance committee, where a board implements or renews a poison pill without shareholder approval |
• | The independent chair or lead independent director and members of the governance committee, where a board amends the charter / articles / bylaws such that the effect may be to entrench directors or to significantly reduce shareholder rights |
• | Members of the compensation committee where the company has repriced options without shareholder approval |
• | If a board maintains a classified structure, it is possible that the director(s) with whom we have a particular concern may not be subject to election in the year that the concern arises. In such situations, if we have a concern regarding a committee or committee chair that is not up for re-election, we will generally register our concern by withholding votes from all available members of the relevant committee |
• | The mix of competencies, experience, and other qualities required to effectively oversee and guide management in light of the stated long-term strategy of the company |
• | The process by which candidates are identified and selected, including whether professional firms or other sources outside of incumbent directors’ networks have been engaged to identify and / or assess candidates |
• | The process by which boards evaluate themselves and any significant outcomes of the evaluation process, without divulging inappropriate and / or sensitive details |
• | The consideration given to board diversity, including, but not limited to, gender, ethnicity, race, age, experience, geographic location, skills, and perspective in the nomination process |
Combined
Chair / CEO Model |
Separate
Chair Model |
||||
Chair / CEO | Lead Director | Chair | |||
Board Meetings | Authority to call full meetings of the board of directors |
Attends
full meetings of the board of directors
Authority to call meetings of independent directors Briefs CEO on issues arising from executive sessions |
Authority to call full meetings of the board of directors | ||
Agenda | Primary responsibility for shaping board agendas, consulting with the lead director | Collaborates with chair / CEO to set board agenda and board information | Primary responsibility for shaping board agendas, in conjunction with CEO | ||
Board Communications | Communicates with all directors on key issues and concerns outside of full board meetings | Facilitates discussion among independent directors on key issues and concerns outside of full board meetings, including contributing to the oversight of CEO and management succession planning | Facilitates discussion among independent directors on key issues and concerns outside of full board meetings, including contributing to the oversight of CEO and management succession planning |
• | Appears to have a legitimate financing motive for requesting blank check authority |
• | Has committed publicly that blank check preferred shares will not be used for anti-takeover purposes |
• | Has a history of using blank check preferred stock for financings |
• | Has blank check preferred stock previously outstanding such that an increase would not necessarily provide further anti-takeover protection but may provide greater financing flexibility |
• | The degree to which the proposed transaction represents a premium to the company’s trading price. We consider the share price over multiple time periods prior to the date of the merger announcement. In most cases, business combinations should provide a premium. We may consider comparable transaction analyses provided by the parties’ financial advisors and our own valuation assessments. For companies facing insolvency or bankruptcy, a premium may not apply |
• | There should be clear strategic, operational, and / or financial rationale for the combination |
• | Unanimous board approval and arm’s-length negotiations are preferred. We will consider whether the transaction involves a dissenting board or does not appear to be the result of an arm’s-length bidding process. We may also consider whether executive and / or board members’ financial interests in a given transaction appear likely to affect their ability to place shareholders’ interests before their own |
• | We prefer transaction proposals that include the fairness opinion of a reputable financial advisor assessing the value of the transaction to shareholders in comparison to recent similar transactions |
• | Whether we believe that the triggering event is in the best interest of shareholders |
• | Whether management attempted to maximize shareholder value in the triggering event |
• | The percentage of total premium or transaction value that will be transferred to the management team, rather than shareholders, as a result of the golden parachute payment |
• | Whether excessively large excise tax gross-up payments are part of the pay-out |
• | Whether the pay package that serves as the basis for calculating the golden parachute payment was reasonable in light of performance and peers |
• | Whether the golden parachute payment will have the effect of rewarding a management team that has failed to effectively manage the company |
• | The company has experienced significant stock price decline as a result of macroeconomic trends, not individual company performance |
• | Directors and executive officers are excluded; the exchange is value neutral or value creative to shareholders; tax, accounting, and other technical considerations have been fully contemplated |
• | There is clear evidence that absent repricing, the company will suffer serious employee incentive or retention and recruiting problems |
• | Publish disclosures in line with industry specific SASB guidelines by year-end, if they have not already done so, or disclose a similar set of data in a way that is relevant to their particular business; and |
• | Disclose climate-related risks in line with the TCFD’s recommendations, if they have not already done so. This should include the company’s plan for operating under a scenario where the Paris Agreement’s goal of limiting global warming to less than two degrees is fully realized, as expressed by the TCFD guidelines. |
• | The company has already taken sufficient steps to address the concern |
• | The company is in the process of actively implementing a response |
• | There is a clear and material economic disadvantage to the company in the near-term if the issue is not addressed in the manner requested by the shareholder proposal |
iShares Trust
File Nos. 333-92935 and 811-09729
Part C
Other Information
Item 28. Exhibits:
PEA # 2,519
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- 2 -
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Item 29. Persons Controlled By or Under Common Control with Registrant:
None.
Item 30. Indemnification:
The Trust (also referred to in this section as the Fund) is organized as a Delaware statutory trust and is operated pursuant to an Amended and Restated Agreement and Declaration of Trust (the Declaration of Trust) that permits the Trust to indemnify its trustees and officers under certain circumstances. Such indemnification, however, is subject to the limitations imposed by the Securities Act of 1933, as amended (the 1933 Act), and the Investment Company Act of 1940, as amended (the 1940 Act).
Section 10.2 of the Declaration of Trust:
The Declaration of Trust provides that every person who is, or has been, a trustee or officer of the Trust (a Covered Person) shall be indemnified by the Trust to the fullest extent permitted by law against liability and against all expenses reasonably incurred or paid in connection with any claim, action, suit, proceeding in which he or she becomes involved as a party or otherwise by virtue of being or having been a trustee or officer and against amounts paid as incurred in the settlement thereof. However, no indemnification shall be provided to a Covered Person:
(i) who shall have been adjudicated by a court or body before which the proceeding was brought (a) to be liable to the Trust or its shareholders by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his office or (b) not to have acted in good faith in the reasonable belief that his action was in the best interest of the Trust; or
(ii) in the event of a settlement, unless there has been a determination that such trustee or officer did not engage in willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his office: (a) by the court or other body approving the settlement; (b) by at least a majority of those trustees who neither are interested persons (as defined in the 1940 Act) of the Trust nor are parties to the matter based upon a review of readily-available facts (as opposed to a full trial-type inquiry); or (c) by written opinion of independent legal counsel based upon a review of readily-available facts (as opposed to a full trial-type inquiry); provided, however, that any shareholder, by appropriate legal proceedings, may challenge any such determination by the trustees or by independent counsel.
Article IX of the Registrants Amended and Restated By-Laws:
The Amended and Restated By-Laws provides that the Trust may purchase and maintain insurance on behalf of any Covered Person or employee of the Trust, including any Covered Person or employee of the Trust who is or was serving at the request of the Trust as a trustee, officer, or employee of a corporation, partnership, association, joint venture, trust, or other enterprise, against any liability asserted against and incurred by such Covered Person or employee in any such capacity or arising out of his or her status as such, whether or not the trustees would have the power to indemnify him or her against such liability. The Trust may not acquire or obtain a contract for insurance that protects or purports to protect any trustee or officer of the Trust against any liability to the Trust or its Shareholders to which such trustee or officer otherwise would be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his or her office.
1933 Act:
Insofar as indemnification for liabilities arising under the 1933 Act may be permitted to directors, officers and controlling persons of the Fund pursuant to the foregoing provisions, or otherwise, the Fund has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the 1933 Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Fund of expenses incurred or paid by a director, officer or controlling person of the Fund in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Fund will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the 1933 Act and will be governed by the final adjudication of such issue.
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Section 17 of the Master Services Agreement between Registrant and State Street:
The Master Services Agreement provides that State Street will indemnify, defend and hold harmless the applicable Fund, its Affiliates, and its respective officers, directors, employees, agents and permitted successors and assigns from any and all damages, fines, penalties, deficiencies, losses, liabilities (including judgments and amounts reasonably paid in settlement) and expenses (including interest, court costs, reasonable fees and expenses of attorneys, accountants and other experts or other reasonable fees and expenses of litigation or other proceedings or of any claim, default or assessment) (Losses) arising from or in connection with any third party claim or threatened third party claim to the extent that such Losses are based on or arising out of any of the following: (a) breach by State Street or any State Street Personnel of any of its data protection, information security or confidentiality obligations hereunder or under a Service Module to which such Fund is a signatory; (b) any claim of infringement or misappropriation of any Intellectual Property Right alleged to have occurred because of systems or other Intellectual Property provided by or on behalf of State Street or based upon the performance of the Services (collectively, the State Street Infringement Items), except to the extent that such infringement or misappropriation relates to or results from; (i) changes made by any Fund or by a third party at the direction of a Fund to the State Street Infringement Items; (ii) changes to the State Street Infringement Items recommended by State Street and not made due to a request from any Fund, provided that State Street has notified such Fund that failure to implement such recommendation would result in infringement within a reasonable amount of time for such Fund to so implement following such notification; (iii) any Funds combination of the State Street Infringement Items with products or services not provided or approved in writing by State Street, except to the extent such combination arises out of any Funds use of the State Street Infringement Items in a manner consistent with the applicable business requirements documentation; (iv) designs or specifications that in themselves infringe and that are provided by or at the direction of any Fund (except in the event of a knowing infringement by State Street); or (v) use by a Fund of any of the State Street Infringement Items in a manner that is not consistent with the applicable business requirements documentation or otherwise not permitted under the Master Services Agreement or any Service Module; (c) any claim or action by, on behalf of, or related to, any prospective, then-current or former employees of State Street, arising from or in connection with a Service Module to which a Fund is a signatory, including: (i) any claim arising under occupational health and safety, workers compensation, ERISA or other applicable Law; (ii) any claim arising from the interview or hiring practices, actions or omissions of employees of State Street; (iii) any claim relating to any violation by employees of State Street, or its respective officers, directors, employees, representatives or agents, of any Law or any common law protecting persons or members of protected classes or categories, such laws or regulations prohibiting discrimination or harassment on the basis of a protected characteristic; and (iv) any claim based on a theory that such Fund is an employer or joint employer of any such prospective, then-current or former employees of State Street; (d) the failure by State Street to obtain, maintain, or comply with any governmental approvals as required under the Master Services Agreement and/or a Service Module to which such Fund is a signatory or such other failures as otherwise agreed by the Parties from time to time; (e) claims by third parties arising from claims by governmental authorities against such Customer for fines, penalties, sanctions, late fees or other remedies to the extent arising from or in connection with State Streets failure to perform its responsibilities under the Master Services Agreement or any Service Module (except to the extent a Fund is not permitted as a matter of public policy to have such an indemnity for financial penalties arising from criminal actions); (f) claims by clients of State Street relating to services, products or systems provided by State Street or a Subcontractor to such client(s) in a shared or leveraged environment; (g) any claim initiated by an Affiliate or potential or actual Subcontractor of State Street asserting rights in connection with a Service Module to which such Fund is a signatory; or (h) other claims as otherwise agreed by the Parties from time to time.
Each Party will indemnify, defend and hold harmless the other Party and their respective officers, directors, employees, agents, successors and assigns from any and all Losses arising from or in connection with any of the following, including Losses arising from or in connection with any third party claim or threatened third party claim: (a) the death or bodily injury of an agent, employee, customer, business invitee or business visitor or other person caused by the tortious or criminal conduct of the other Party; or (b) the damage, loss or destruction of real or tangible personal property caused by the tortious or criminal conduct of the other Party.
Section 8.02 of the Distribution Agreement between Registrant and BRIL:
The Distribution Agreement provides that the Trust agrees to indemnify, defend and hold harmless, BRIL, each of its directors, officers, principals, representatives, employees and each person, if any, who controls BRIL within the meaning of Section 15 of the 1933 Act (collectively, the BRIL Indemnified Parties) on an as-incurred basis from and against any and all losses, claims, damages or liabilities whatsoever (including any investigation, legal or other expenses incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted) (collectively, Losses) to which the BRIL Indemnified Parties become subject, arising out of or based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any Prospectus or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading and (ii) any breach of any representation, warranty or covenant made by the Trust in this Agreement; provided, however, that the Trust shall not be liable in any such case to the extent that any Loss arises out of or is based upon (A) an untrue statement or alleged untrue statement or omission or alleged omission made in the Prospectus about BRIL in reliance upon and in conformity with written information furnished to the Trust by BRIL expressly for use therein; (B) BRILs own willful misfeasance, willful misconduct or gross negligence or BRILs reckless disregard of its obligations under this Agreement or arising out of the failure of BRIL to deliver a current Prospectus; or (C) BRILs material breach of this Agreement.
- 5 -
The Distribution Agreement also provides that BRIL agrees to indemnify and hold harmless the Trust, each of its trustees, officers, employees and each person, if any, who controls the Trust within the meaning of Section 15 of the 1933 Act (collectively, the Trust Indemnified Parties) from and against any and all losses to which the Trust Indemnified Parties become subject, arising out of or based upon (i) any untrue statement or alleged untrue statement of a material fact contained in the Prospectus or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, in reliance upon and in conformity with written information furnished to the Trust by BRIL about BRIL expressly for use therein; (ii) any breach of any representation, warranty or covenant made by BRIL in the Distribution Agreement; and (iii) the actions or omissions of any person acting under the supervision of BRIL in providing services under the Distribution Agreement; provided, however, that BRIL shall not be liable in any such case to the extent that any loss arises out of or is based upon (A) the Trusts own willful misfeasance, willful misconduct or gross negligence or the Trusts reckless disregard of its obligations under the Distribution Agreement or (B) the Trusts material breach of the Distribution Agreement.
The Authorized Participant Agreement:
The Authorized Participant Agreement provides that the Authorized Participant (the Participant) agrees to indemnify and hold harmless the Fund and its respective subsidiaries, affiliates, directors, officers, employees and agents, and each person, if any, who controls such persons within the meaning of Section 15 of the 1933 Act (each an Indemnified Party) from and against any loss, liability, cost and expense (including attorneys fees) incurred by such Indemnified Party as a result of (i) any breach by the Participant of any provision of the Authorized Participant Agreement that relates to the Participant; (ii) any failure on the part of the Participant to perform any of its obligations set forth in the Authorized Participant Agreement; (iii) any failure by the Participant to comply with applicable laws, including rules and regulations of self-regulatory organizations; or (iv) actions of such Indemnified Party in reliance upon any instructions issued in accordance with Annex II, III or IV (as each may be amended from time to time) of the Authorized Participant Agreement reasonably believed by the distributor and/or the transfer agent to be genuine and to have been given by the Participant.
Section 5.1 of the Fifth Amended and Restated Securities Lending Agency Agreement:
The Fifth Amended and Restated Securities Lending Agency Agreement provides that the Trust on behalf of each Fund agrees to indemnify BTC and to hold it harmless from and against any and all costs, expenses, damages, liabilities or claims (including reasonable fees and expenses of counsel) which BTC may sustain or incur or which may be asserted against BTC by reason of or as a result of any action taken or omitted by BTC in connection with or arising out of BTCs operating under and in compliance with this Agreement, except those costs, expenses, damages, liabilities or claims arising out of BTCs negligence, bad faith, willful misconduct, or reckless disregard of its obligations and duties hereunder. Actions taken or omitted in reasonable reliance upon Oral Instructions or Written Instructions, any Certificate, or upon any information, order, indenture, stock certificate, power of attorney, assignment, affidavit or other instrument reasonably believed by BTC to be genuine or bearing the signature of a person or persons reasonably believed by BTC to be genuine or bearing the signature of a person or persons reasonably believed to be authorized to sign, countersign or execute the same, shall be presumed to have been taken or omitted in good faith.
The Fifth Amended and Restated Securities Lending Agency Agreement also provides that BTC shall indemnify and hold harmless the Trust and each Fund, its Board of Trustees and its agents and BFA and any investment adviser for the Funds from any and all loss, liability, costs, damages, actions, and claims (Loss) to the extent that any such Loss arises out of the material breach of this Agreement by or negligent acts or omissions or willful misconduct of BTC, its officers, directors or employees or any of its agents or subcustodians in connection with the securities lending activities undertaken pursuant to this Agreement, provided that BTCs indemnification obligation with respect to the acts or omissions of its subcustodians shall not exceed the indemnification provided by the applicable subcustodian to BTC.
The Participation Agreement:
The Form of Participation Agreement generally provides that each Investing Fund agrees to hold harmless and indemnify the iShares Funds, including any of their principals, directors or trustees, officers, employees and agents, against and from any and all losses, expenses or liabilities incurred by or claims or actions (Claims) asserted against the iShares Funds, including any of their principals, directors or trustees, officers, employees and agents, to the extent such Claims result from (i) a violation or alleged violation by such Investing Fund of any provision of this Agreement or (ii) a violation or alleged violation by such Investing Fund of the terms and conditions of the iShares Order, such indemnification to include any reasonable counsel fees and expenses incurred in connection with investigating and/or defending such Claims.
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The iShares Funds agree to hold harmless and indemnify an Investing Fund, including any of its directors or trustees, officers, employees and agents, against and from any Claims asserted against the Investing Fund, including any of its directors or trustees, officers, employees and agents, to the extent such Claims result from (i) a violation or alleged violation by the iShares Fund of any provision of this Agreement or (ii) a violation or alleged violation by the iShares Fund of the terms and conditions of the iShares Order, such indemnification to include any reasonable counsel fees and expenses incurred in connection with investigating and/or defending such Claims; provided that no iShares Fund shall be liable for indemnifying any Investing Fund for any Claims resulting from violations that occur as a result of incomplete or inaccurate information provided by the Investing Fund to such iShares Fund pursuant to terms and conditions of the iShares Order or this Agreement.
Sublicense Agreements between the Registrant and BFA:
The Sublicense Agreements generally provide that the Trust shall indemnify and hold harmless BFA, its officers, employees, agents, successors, and assigns against all judgments, damages, costs or losses of any kind (including reasonable attorneys and experts fees) resulting from any claim, action or proceeding (collectively claims) that arises out of or relates to (a) the creation, marketing, advertising, selling, and operation of the Trust or interests therein, (b) any breach by BFA of its covenants, representations, and warranties under the License Agreement caused by the actions or inactions of the Trust, or (c) any violation of applicable laws (including, but not limited to, banking, commodities, and securities laws) arising out of the offer, sale, operation, or trading of the Trust or interests therein, except to the extent such claims result from the negligence, gross negligence or willful misconduct of BFA or an affiliate of BFA. The provisions of this section shall survive termination of this Sublicense Agreement.
Item 31. Business and Other Connections of the Investment Adviser:
The Trust is advised by BFA, an indirect wholly owned subsidiary of BlackRock, Inc., 400 Howard Street, San Francisco, CA 94105. BFAs business is that of a registered investment adviser to certain open-end, management investment companies and various other institutional investors.
The directors and officers of BFA consist primarily of persons who during the past two years have been active in the investment management business. To the knowledge of the Registrant, except as set forth below, none of the directors or executive officers of BFA is or has been at any time during the past two fiscal years engaged in any other business, profession, vocation or employment of a substantial nature. Information as to the executive officers and directors of BFA is included in its Form ADV filed with the SEC (File No. 801-22609) and is incorporated herein by reference.
Director or Officer | Capacity with BFA |
Principal Business(es) During Last Two Fiscal Years |
||
FINK, LAURENCE DOUGLAS | CHIEF EXECUTIVE OFFICER | Chairman and Chief Executive Officer of BlackRock, Inc. | ||
GOLDSTEIN, ROBERT LAWRENCE | CHIEF OPERATING OFFICER AND DIRECTOR | Senior Managing Director and Chief Operating Officer of BlackRock, Inc. | ||
KAPITO, ROBERT STEVEN | PRESIDENT | President and Director of BlackRock, Inc. | ||
MEADE, CHRISTOPHER JOSEPH | GENERAL COUNSEL AND CHIEF LEGAL OFFICER | Senior Managing Director and Chief Legal Officer of BlackRock, Inc. | ||
PARK, CHARLES CHOON SIK | CHIEF COMPLIANCE OFFICER | Managing Director of BlackRock, Inc. and Chief Compliance Officer of BlackRocks registered investment companies | ||
SHEDLIN, GARY STEPHEN | CHIEF FINANCIAL OFFICER AND DIRECTOR | Senior Managing Director and Chief Financial Officer of BlackRock Inc. | ||
WALTCHER, DANIEL RUSSELL | DIRECTOR | Managing Director and Deputy General Counsel of BlackRock, Inc. |
BIL acts as sub-adviser for a number of affiliated registered investment companies advised by BFA. The address of each of these registered investment companies is 400 Howard Street, San Francisco, CA 94105. The address of BIL is Exchange Place One, 1 Semple Street, Edinburgh, EH3 8BL, United Kingdom. To the knowledge of the Registrant, except as set forth below, none of the directors or executive officers of BIL is or has been at any time during the past two fiscal years engaged in any other business, profession, vocation or employment of a substantial nature. Information as to the executive officers and directors of BIL is included in its Form ADV filed with the SEC (File No. 801-51087) and is incorporated herein by reference.
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Director or Officer | Capacity with BIL |
Principal Business(es) During Last Two Fiscal Years |
||
CHARRINGTON, NICHOLAS JAMES | DIRECTOR | Senior Adviser and Non-Executive Chairman of EMEA of BlackRock, Inc., Non-Executive Director of BlackRock Group Limited BlackRock Investment Management (UK) Limited, BlackRock Advisors (UK) Limited and BIL (collectively, the Joint Boards) | ||
CLAUSEN, CHRISTIAN | DIRECTOR | Senior Advisor of BlackRock, Inc. | ||
DE FREITAS, ELEANOR JUDITH | DIRECTOR | Managing Director of BlackRock, Inc. | ||
FISHWICK, JAMES EDWARD | DIRECTOR | Managing Director of BlackRock, Inc. | ||
ARCHIBALD, ARTHUR, BENJAMIN | GENERAL COUNSEL | Managing Director of BlackRock, Inc. | ||
LORD, RACHEL | CHIEF EXECUTIVE OFFICER AND DIRECTOR | Senior Managing Director of BlackRock, Inc. | ||
GIBSON, NICHOLAS, JOHN | CHIEF COMPLIANCE OFFICER | Managing Director of BlackRock, Inc. | ||
MULLIN, STACEY JANE | CHIEF OPERATING OFFICER AND DIRECTOR | Managing Director of BlackRock, Inc. | ||
MCDONALD, COLIN, ALISTAIR | CHIEF FINANCIAL OFFICER | Managing Director of BlackRock, Inc., Director of BlackRock Inc. | ||
YOUNG, MARGARET ANNE | DIRECTOR | Non-Executive Director of the Joint Boards |
Item 32. Principal Underwriters:
(a) |
Furnish the name of each investment company (other than the Registrant) for which each principal underwriter currently distributing the securities of the Registrant also acts as a principal underwriter, distributor or investment adviser. |
BRIL, the distributor of certain funds, acts as the principal underwriter or placement agent, as applicable, for each of the following open-end registered investment companies including certain funds of the Registrant:
BlackRock Advantage Global Fund, Inc. | BlackRock Large Cap Series Funds, Inc. | |
BlackRock Advantage SMID Cap Fund, Inc. | BlackRock Latin America Fund, Inc. | |
BlackRock Allocation Target Shares | BlackRock Liquidity Funds | |
BlackRock Balanced Capital Fund, Inc. | BlackRock Long-Horizon Equity Fund | |
BlackRock Bond Fund, Inc. | BlackRock Mid-Cap Value Series, Inc. | |
BlackRock California Municipal Series Trust | BlackRock Multi-State Municipal Series Trust | |
BlackRock Capital Appreciation Fund, Inc. | BlackRock Municipal Bond Fund, Inc. | |
BlackRock Emerging Markets Fund, Inc. | BlackRock Municipal Series Trust | |
BlackRock Equity Dividend Fund | BlackRock Natural Resources Trust | |
BlackRock ETF Trust | BlackRock Series Fund, Inc. | |
BlackRock ETF Trust II | BlackRock Series Fund II, Inc. | |
BlackRock Series, Inc. |
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BRIL provides numerous financial services to BlackRock-advised funds and is the distributor of BlackRocks open-end funds. These services include coordinating and executing Authorized Participation Agreements, preparing, reviewing and providing advice with respect to all sales literature and responding to Financial Industry Regulatory Authority comments on marketing materials.
(b) |
Set forth below is information concerning each director and officer of BRIL. The principal business address for each such person is 55 East 52nd Street, New York, NY 10055. |
Name |
Position(s) and Office(s) with BRIL |
Position(s) and Office(s) with Registrant |
||
Abigail Reynolds | Chairman and Member, Board of Managers, and Chief Executive Officer | None | ||
Christopher Meade | Chief Legal Officer, General Counsel and Senior Managing Director | None | ||
Lauren Bradley | Chief Financial Officer and Vice President | None | ||
Gregory Rosta | Chief Compliance Officer and Director | None | ||
Jon Maro | Chief Operating Officer and Director | None | ||
Andrew Dickson | Secretary and Managing Director | None | ||
Terri Slane | Assistant Secretary and Director | None | ||
Anne Ackerley | Member, Board of Managers, and Managing Director | None | ||
Michael Bishopp | Managing Director | None | ||
Thomas Callahan | Member, Board of Managers, and Managing Director | None | ||
Samara Cohen | Managing Director | None | ||
Jonathan Diorio | Managing Director | None | ||
Lisa Hill | Managing Director | None | ||
Brendan Kyne | Managing Director | None | ||
Paul Lohrey | Managing Director | None | ||
Martin Small | Member, Board of Managers, and Managing Director | None | ||
Jonathan Steel | Managing Director | None | ||
Ariana Brown | Director | None | ||
Chris Nugent | Director | None |
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Lourdes Sanchez | Vice President | None | ||
Lisa Belle | Anti-Money Laundering Officer | Anti-Money Laundering Compliance Officer | ||
Zach Buchwald | Member, Board of Managers | None | ||
Gerald Pucci | Member, Board of Managers | None | ||
Philip Vasan | Member, Board of Managers | None |
(c) |
Not applicable. |
Item 33. Location of Accounts and Records:
(a) |
The Trust maintains accounts, books and other documents required by Section 31(a) of the 1940 Act and the rules thereunder (collectively, the Records) at the offices of BlackRock, 60 State Street, Boston, MA 02109. |
(b) |
BFA and/or its affiliates maintains all Records relating to its services as investment adviser at 400 Howard Street, San Francisco, CA 94105. |
(c) |
BRIL maintains all Records relating to its services as distributor of certain Funds at 1 University Square Drive, Princeton, NJ 08540. |
(d) |
State Street maintains all Records relating to its services as transfer agent at 1 Heritage Drive, North Quincy, MA 02171. State Street maintains all Records relating to its services as fund accountant and custodian at 1 Lincoln Street, Mail Stop SFC0805, Boston, MA 02111. |
(e) |
BlackRock International Limited maintains all Records relating to its functions as current or former sub-adviser at Exchange Place One, 1 Semple Street, Edinburgh, EH3 8BL, United Kingdom. |
Item 34. Management Services:
Not applicable.
Item 35. Undertakings:
Not applicable.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended, the Registrant has duly caused this Post-Effective Amendment No. 2,519 to the Registration Statement to be signed on its behalf by the undersigned, duly authorized, in the City of San Francisco and the State of California on the 21st day of January, 2022.
iSHARES TRUST | ||
By: |
|
|
Armando Senra* | ||
President | ||
Date: | January 21, 2022 |
Pursuant to the requirements of the Securities Act of 1933, as amended, this Post-Effective Amendment No. 2,519 to the Registration Statement has been signed below by the following persons in the capacities and on the date indicated.
By: |
|
|
Salim Ramji* | ||
Trustee | ||
Date: | January 21, 2022 | |
John E. Martinez* |
||
Trustee | ||
Date: | January 21, 2022 | |
Cecilia H. Herbert* |
||
Trustee | ||
Date: | January 21, 2022 | |
John E. Kerrigan* |
||
Trustee | ||
Date: | January 21, 2022 | |
Robert S. Kapito* |
||
Trustee | ||
Date: | January 21, 2022 |
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* |
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Exhibit Index | ||
(h.5) | Fifth Amended and Restated Securities Lending Agency Agreement. |
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Exhibit (h.5)
FIFTH AMENDED AND RESTATED
SECURITIES LENDING AGENCY AGREEMENT
AGREEMENT, dated as of January 1, 2022, between iShares, Inc., a Maryland corporation, iShares U.S. ETF Company, Inc., a Maryland corporation, iShares U.S. ETF Trust, a Delaware statutory trust, and iShares Trust, a Delaware statutory trust (each singly and together, the Company), each acting on behalf of the funds listed on Schedule A hereto and any future series or portfolio of the Company (each, a Fund and collectively, the Funds), and BlackRock Institutional Trust Company, N.A., a national banking association (BTC) and its successors.
WHEREAS, the Company is registered as an open-end investment company under the Investment Company Act of 1940, as amended (the 1940 Act);
WHEREAS, BTC acts as the agent for the Company and its corresponding Funds for the purpose of lending Securities (as defined below) in the Accounts (as defined below) pursuant to a Fourth Amended and Restated Securities Lending Agency Agreement dated as of January 1, 2021; and
WHEREAS, the parties to this Agreement desire to amend and restate such agreement on the terms set forth herein;
NOW, THEREFORE, for and in consideration of the mutual promises set forth herein, the parties hereto agree as follows:
1. Definitions.
Whenever used in this Agreement, unless the context otherwise requires, the following words shall have the meanings set forth below. Capitalized terms used but not defined herein shall have the meaning assigned to them in the applicable Securities Lending Agreement.
1.1 Account shall mean an account maintained under the supervision of the applicable Funds custodian or any sub-custodian on behalf of such Fund.
1.2 Approved Investment shall mean any type of investment permitted for Cash Collateral under the Securities Lending Guidelines.
1.3 Authorized Person shall mean any officer of the Company and any other person, whether or not any such person is an officer or employee of the Company, duly authorized by resolutions of the Company to give Oral Instructions and/or Written Instructions on behalf of the Company, such persons to be designated in a Certificate which contains a specimen signature of such person.
1.4 Book-Entry System shall mean the Federal Reserve/Treasury book-entry system for receiving and delivering Government Securities (as defined herein), its successors or equivalent and nominees.
1.5 Borrower shall mean any entity which is permitted to borrow Securities from the Company pursuant to then applicable law, regulation, and/or interpretation and pursuant to the Securities Lending Guidelines, and which has a valid Securities Lending Agreement in place with BTC.
1.6 Business Day shall mean, with respect to a Fund for which Securities loans are outstanding pursuant to this Agreement, a day on which both such Fund and BTC are open for business.
1.7 Cash Collateral shall mean either Fed funds or New York Clearing House funds or their equivalent if denominated in U.S. dollars, or the equivalent if the Cash Collateral is denominated in a currency other than U.S. dollars, as applicable for a particular loan of Securities.
1.8 Cash Management Costs shall mean the expenses incurred in connection with the management and investment of a Funds Cash Collateral, including fees and expenses payable to BTC, BlackRock Fund Advisors (BFA) or any other affiliate of BTC (or its successors) as a result of the investment of Cash Collateral in any joint account, fund or similar vehicle.
1.9 Certificate shall mean any notice, instruction, schedule or other instrument in writing, authorized or required by this Agreement to be given to BTC, which is actually received by BTC and signed on behalf of the Company by an Authorized Person or a person reasonably believed by BTC to be an Authorized Person.
1.10 Collateral shall mean Cash Collateral and Non-Cash Collateral, as applicable.
1.11 Collateral Account shall mean an account established and maintained by the Custodian for the purpose of holding Collateral, which in the case of Non-Cash Collateral may be an Account or other account established for the purpose of holding Non-Cash Collateral. A Collateral Account may include a joint account as permitted by the Securities Lending Guidelines.
1.12 Custodian shall mean State Street Bank and Trust Company, a trust company organized and existing under the laws of the Commonwealth of Massachusetts, or such other company that may from time to time be retained as custodian by the Company with respect to one or more Funds.
1.13 Depository shall mean the Depository Trust Company, Euroclear, and any other securities depository, sub-depository or clearing agency (and their respective successors and nominees) authorized under applicable law or regulation to act as a securities depository, sub-depository or clearing agency, including any foreign securities depository or sub-depository for the Company.
1.14 Distributions means interest, dividends and other payments and distributions, including non-cash distributions, received with respect to Collateral and Approved Investments.
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1.15 Government Security shall mean book-entry Treasury securities (as defined in Subpart 0 of Treasury Department Circular No. 300, 31 C.F.R. 306) and any other securities issued or guaranteed by the United States government or any agency or instrumentality of the United States government.
1.16 Lending Complex shall mean the Funds as defined in the preamble to this Agreement.
1.17 Lending Income and iShares Complex Breakpoint have the meanings set forth in Section 5.6(a)(i) of this Agreement.
1.18 Letter of Credit shall mean an unconditional and irrevocable letter of credit in favor of BTC as agent for a Fund issued by a bank other than the Borrower, the creditworthiness of which has been deemed to be acceptable by BTC and which meets any applicable requirements in the Securities Lending Guidelines.
1.19 Non-Cash Collateral means Government Securities and Letters of Credit, plus such other non-cash collateral as may be then permitted by applicable law, regulation and/or interpretation, and the Securities Lending Guidelines.
1.20 Oral Instructions shall mean verbal instructions actually received by BTC from an Authorized Person or from a person reasonably believed by BTC to be an Authorized Person.
1.21 Rebate shall mean the amount payable by a Fund to a Borrower in connection with Securities loans at any time collateralized by Cash Collateral.
1.22 Securities Lending Agreement shall mean with respect to any Borrower, the agreement pursuant to which BTC lends securities on behalf of its customers (including the Funds) to such Borrower, as amended from time to time, which agreement shall meet any applicable requirements in the Securities Lending Guidelines. The Securities Lending Agreement may be in the form of a master agreement covering a series of Securities lending transactions from multiple lenders, including the Company.
1.23 Securities Lending Guidelines shall mean guidelines governing the Companys Securities lending program adopted by the Company and provided to BTC from time to time. The Securities Lending Guidelines may address any aspect of the Companys Securities lending program, including without limitation the kinds of Securities that may be lent, permissible forms of Collateral, permissible Approved Investments, the selection of Borrowers, and regular reporting to the Company.
1.24 Securities Loan Fee shall mean the amount payable by a Borrower to BTC, as agent for the Funds, pursuant to the applicable Securities Lending Agreement in connection with Securities loans, if any, collateralized by Non-Cash Collateral.
1.25 Security shall mean any Government Securities, non-U.S. securities, U.S. common stock and other equity securities, bonds, debentures, corporate debt securities, notes, mortgages, other obligations and financial assets, and any certificates, warrants or other instruments representing rights to receive, purchase, or subscribe for the same, or evidencing or representing any other rights or interests therein, which are available for lending pursuant to Section 2.2 of this Agreement.
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1.26 Written Instructions shall mean written communications actually received by BTC from an Authorized Person or from a person reasonably believed by BTC to be an Authorized Person by letter, memorandum, telecopy facsimile, computer, video (CRT) terminal or other on-line system, or any other method whereby BTC is able to verify with a reasonable degree of certainty the identity of the sender.
2. Appointment; Scope of Agency Authority.
2.1 Appointment. The Company, on behalf of each Fund, hereby appoints BTC as its agent to lend Securities in the Accounts to Borrowers from time to time as hereinafter set forth, and BTC hereby accepts appointment as such agent and agrees to so act.
2.2 Securities Subject to Lending. Unless the Company provides BTC with Written Instructions to the contrary or otherwise agreed by the Company and BTC, all Securities maintained in the Accounts shall be available for lending pursuant to this Agreement.
2.3 Securities Lending Agreement.
(a) Attached hereto as Exhibit A are the standard forms of Securities Lending Agreements in effect between BTC and the Borrowers as of the date hereof. BTC shall provide the Company with any proposed material amendments or changes, and notify the Company of any such amendments or changes, to any form of Securities Lending Agreement to be used prior to their effectiveness. The Company may elect, without penalty, to terminate any Borrower if it opposes the change.
(b) BTC is hereby authorized to lend Securities in the Accounts to Borrowers pursuant to the Securities Lending Agreements, this Agreement and the Securities Lending Guidelines.
2.4 Loan Opportunities. The Company on behalf of each Fund acknowledges and agrees that BTC shall have the right to decline to make any loans of Securities under any Securities Lending Agreement, to discontinue lending or to terminate any loans of Securities under any Securities Lending Agreement in its sole discretion. The Company on behalf of each Fund agrees that it shall have no claim against BTC based on, or relating to, loans made for other customers, or loan opportunities refused hereunder, whether or not BTC has made fewer or more loans for any other customer than for a Fund, and whether or not any loan for another customer, or the opportunity refused, could have resulted in loans made hereunder.
2.5 Use of Book-Entry System and Depositories. The Company on behalf of each Fund hereby authorizes BTC on a continuous and on-going basis, to deposit in the Book-Entry System and any Depositories all Securities eligible for deposit therein and to utilize the Book-Entry System and Depositories to the extent possible in connection with its receipt and delivery of Securities, Collateral, Approved Investments and monies under this Agreement. Where Securities, Non-Cash Collateral and Approved Investments eligible for deposit in the Book-Entry System or a Depository are transferred to the applicable Account or Collateral Account, BTC
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shall identify or cause to be identified as belonging to the applicable Fund a quantity of Securities in a fungible bulk of Securities shown on BTCs account on the books of the Book-Entry System or the applicable Depository. Securities, Collateral and Approved Investments deposited in the Book-Entry System or a Depository will be commingled in accounts which include assets held by BTC for customers, including but not limited to accounts in which BTC acts in a fiduciary or agency capacity, as well as assets held by or on behalf of other clients or participants of the Book-Entry System or Depository.
2.6 Use of Third-Party Service Providers. The Company on behalf of each Fund hereby acknowledges and agrees that BTC may utilize third-party service providers to perform or analyze the functions described herein, including service providers in which BTC may have an ownership interest. As permitted by Section 5.8 below, these services may require the transmission, use or sharing of data created in Securities lending transactions involving the Funds. BTC shall bear the cost of any such service providers out of its portion of the proceeds from Securities lending.
2.7 Further Action. The Company authorizes and empowers BTC to execute in the Companys name all agreements and documents as may be necessary or appropriate in BTCs judgment to carry out the purposes of this Agreement.
3. Representations and Warranties.
3.1 Companys Representations. The Company hereby represents and warrants to BTC, which representations and warranties shall be deemed to be continuing and to be reaffirmed on any day that a Securities loan hereunder is outstanding, that:
(a) this Agreement and the Securities Lending Guidelines have been approved by the Board of Trustees or Board of Directors of the Company (as applicable); this Agreement is, and, if properly entered into under the terms of this Agreement and the Securities Lending Guidelines, each Securities loan and Approved Investment will be, legally and validly entered into by the Company on behalf of each Fund, does not, and will not, violate any statute, regulation, rule, order or judgment binding on the Fund, or any provision of the Companys charter or by-laws, or any agreement binding on the Company or affecting its property, and is enforceable against the Company and each Fund in accordance with its terms, except as may be limited by bankruptcy, insolvency or similar laws, or by equitable principles relating to or limiting creditors rights generally;
(b) the person executing this Agreement and all Authorized Persons acting on behalf of the Company or any Fund has and have been duly and properly authorized to do so;
(c) each Fund is lending Securities as principal for its own account and it will not transfer, assign or encumber its interest in, or rights with respect to, any Securities loans; and
(d) all Securities available for lending pursuant to this Agreement are free and clear of all liens, claims, security interests and encumbrances that would preclude their being lent as contemplated by this Agreement. The Company shall promptly notify BTC in the manner agreed between the parties from time to time when any Securities are no longer subject to the representations contained in this sub-paragraph (d).
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3.2 BTCs Representations. BTC hereby represents and warrants to the Company, which representations and warranties shall be deemed to be continuing and to be reaffirmed on any day that a Securities loan hereunder is outstanding, that:
(a) this Agreement is legally and validly entered into by BTC, does not and will not, violate any statute, regulation, rule, order or, judgment binding on BTC, or any provision of BTCs charter or by-laws, or any agreement binding on BTC or affecting its property, and is enforceable against BTC in accordance with its terms, except as may be limited by bankruptcy, insolvency or similar laws, or by equitable principles relating to or limiting creditors rights generally;
(b) both the person or persons executing this Agreement on behalf of BTC and all persons acting on BTCs behalf pursuant to this Agreement have been duly and properly authorized to do so; and
(c) it will comply with all laws, rules and regulations, including without limitation the conditions of any exemptive orders granted to the Company by the Securities and Exchange Commission with respect to securities lending transactions, if required, applicable to the Securities lending transactions contemplated by this Agreement.
4. Securities Lending Transactions.
4.1 Compliance with Securities Lending Guidelines. BTC hereby acknowledges receipt of the current Securities Lending Guidelines. The Company shall promptly notify BTC of any changes to the Securities Lending Guidelines. BTC acknowledges and agrees that it shall only lend Securities on behalf of the Funds in accordance with the conditions of the Securities Lending Guidelines applicable to the Funds lending agent.
4.2 Loan Initiation. From time to time BTC may lend Securities to Borrowers and deliver such Securities against receipt of Collateral in accordance with the applicable Securities Lending Agreement and the Securities Lending Guidelines. If instructed by the Company in writing, BTC shall refrain from lending a particular Security or from making loans to a particular Borrower.
4.3 Receipt of Collateral; Approved Investments.
(a) With respect to any Securities loan entered into on behalf of a Fund, BTC shall require that the Borrower deliver and maintain Collateral that is equal at all times during the term of the loan to at least the market value of the Securities loaned and any accrued interest thereon. If Cash Collateral is received, BTC is hereby authorized and directed, without obtaining any further approval from the Fund, to invest and reinvest all or substantially all of the Cash Collateral received in any Approved Investments, including in the name of and on behalf of the Fund to redeem, withdraw or sell the same, and to receive distributions in the name of and on behalf of the Fund in accordance with the Securities Lending Guidelines. The Company hereby agrees to execute all necessary documents and take all necessary actions reasonably requested by BTC in order to permit BTC to so act with regard to Approved Investments. BTC shall instruct the Custodian to credit all Collateral, Approved Investments and Distributions received with respect to Collateral and Approved Investments to the applicable Collateral Account or Account, as the case may be, and mark its books and records to identify the Funds ownership thereof as appropriate.
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(b) All Approved Investments shall be for the account and risk of the Fund. To the extent any loss arising out of Approved Investments results in a deficiency in the amount of Collateral available for return to a Borrower pursuant to the Securities Lending Agreement, the Fund agrees to pay BTC on demand cash in an amount equal to such deficiency.
(c) Except as otherwise provided herein, all Collateral, Approved Investments and Distributions credited to the applicable Collateral Account or Account, as the case may be, shall be controlled by, and subject only to the instructions of, BTC, and BTC shall not be required to comply with any instructions of the Company with respect to the same. BTC acknowledges that it has control of the Cash Collateral and the security entitlements relating to the Non-Cash Collateral on behalf of the Fund. The Fund has a perfected security interest in the Cash Collateral pursuant to UCC Section 9-104(a)(5) and the security entitlements relating to the Non-Cash Collateral pursuant to UCC Section 8-106(d)(3). UCC means the Uniform Commercial Code as in effect from time to time in the State of New York; provided, however, that, at any time, if by reason of mandatory provisions of law any or all of the perfection or priority of BTCs security interest in any item or portion of the Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term UCC shall mean the Uniform Commercial Code as in effect, at such time, in such other jurisdiction for purposes of the provisions relating to such perfection or priority and for purposes of definitions relating to such provisions.
4.4 Distributions on Loaned Securities. Except as provided in the next sentence, all amounts received from the Borrower equivalent to all interest, dividends, and other distributions which the owner of the loaned Securities is entitled to receive shall be credited to the Funds Account on the date such amounts are delivered by the Borrower to the Custodian. Any non-cash distribution on loaned Securities which is in the nature of a stock split or a stock dividend shall be added to the applicable loan (and shall be considered to constitute loaned Securities) as of the date such non-cash distribution is declared payable whether or not it has been received by the Borrower, provided that any such addition shall be conditional upon the actual receipt of such non-cash distribution and may be reversed by the Custodian to the extent that such non-cash distribution is not received.
4.5 Mark to Market. BTC shall on each Business Day mark to market in U.S. dollars the value of all Collateral (other than Cash Collateral) and Securities loaned hereunder and accordingly receive and release Collateral in accordance with the applicable Securities Lending Agreement.
4.6 Collateral Substitutions. BTC may accept substitutions of Collateral in accordance with the applicable Securities Lending Agreement and the Securities Lending Guidelines and shall credit all such substitutions to the Collateral Account; provided, however, that unless other Collateral has been mutually agreed upon in writing by BTC and the Fund (including by means of the Securities Lending Guidelines), no other Collateral may be substituted for Cash Collateral.
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4.7 Termination of Loans. In addition to BTCs authority to terminate a loan of Securities pursuant to the terms of the applicable Securities Lending Agreement as described in Section 2.4 above, BTC shall terminate any Securities loan to a Borrower in accordance with the applicable Securities Lending Agreement promptly:
(a) upon receipt by BTC of Oral Instructions or Written Instructions instructing it to terminate a Securities loan; provided that the Company may require that each Security must be returned to the Fund by no later than the date which is the standard settlement date for trades of such Security entered into on the date such Oral Instruction or Written Instruction is received by BTC;
(b) upon receipt by BTC of Oral Instructions or Written Instructions pursuant to the Securities Lending Guidelines to no longer lend to a particular Borrower;
(c) upon receipt of written notice from the Company terminating this Agreement with respect to one or more Funds in accordance with Section 6; or
(d) as contemplated by the Securities Lending Guidelines.
4.8 Securities Loan Fee. BTC shall receive, hold and administer any applicable Securities Loan Fee paid by any Borrower pursuant to a Securities Lending Agreement and credit all such amounts received to the applicable Account of the lending Fund.
4.9 Borrowers Financial Condition. BTC has delivered to BFA, the investment adviser to the Funds, each Borrowers most recent statements required to be furnished to customers by Rule 17a-5(c) of the Securities and Exchange Commission under the Securities Exchange Act of 1934, or such other documents as may be required, as have been made available to BTC pursuant to the Securities Lending Agreements. BTC shall promptly deliver to any investment adviser for the Funds all statements and financial information subsequently delivered to BTC and required to be furnished to BTC under the Securities Lending Agreements.
4.10 Transfer Taxes and Necessary Costs. All transfer taxes and necessary costs with respect to the transfer of the loaned Securities by the Fund to the Borrower and the Borrower to the Fund upon the termination of the loan shall be paid by the Borrower in accordance with the applicable Securities Lending Agreement.
4.11 BTCs Obligation. Except as specifically set forth herein, or in any applicable Securities Lending Agreement, BTC shall have no duty or obligation to take action to effect payment by a Borrower of any amounts owed by such Borrower pursuant to the Securities Lending Agreement.
4.12 Loans to Affiliated Borrowers. The Company and BTC have obtained an exemptive order from the Securities and Exchange Commission that permits BTC to lend Securities on behalf of the Funds to Affiliated Borrowers, provided that such loans are made in accordance with the conditions and procedures outlined in the exemptive order. BTC shall only make loans to Affiliated Borrowers in accordance with such conditions and procedures, as they may be amended from time to time, and only so long as they remain applicable, and in accordance with the Securities Lending Guidelines.
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5. Concerning BTC.
5.1 Standard of Care: Indemnification.
(a) It is expressly understood and agreed that in exercising its rights and performing its obligations hereunder, BTC owes no fiduciary duty to the Fund. BTC shall not be liable for any costs, expenses, damages, liabilities or claims (including reasonable attorneys and accountants fees) incurred by the Fund, except to the extent those costs, expenses, damages, liabilities or claims result from BTCs material breach of this Agreement or BTCs negligence, willful misconduct, bad faith, or reckless disregard of its obligations and duties hereunder.
Neither the Company nor BTC shall have any obligation hereunder for costs, expenses, damages, liabilities or claims (including reasonable attorneys and accountants fees), which are sustained or incurred by reason of any action or inaction by the Book-Entry System or any Depository or their respective successors or nominees. In no event shall either party be liable to the other for special, punitive or consequential damages, arising under or in connection with this Agreement, even if previously informed of the possibility of such damages.
(b) The Company on behalf of each Fund agrees to indemnify BTC and to hold it harmless from and against any and all costs, expenses, damages, liabilities or claims (including reasonable fees and expenses of counsel) which BTC may sustain or incur or which may be asserted against BTC by reason of or as a result of any action taken or omitted by BTC in connection with or arising out of BTCs operating under and in compliance with this Agreement, except those costs, expenses, damages, liabilities or claims arising out of BTCs negligence, bad faith, willful misconduct, or reckless disregard of its obligations and duties hereunder. Actions taken or omitted in reasonable reliance upon Oral Instructions or Written Instructions, any Certificate, or upon any information, order, indenture, stock certificate, power of attorney, assignment, affidavit or other instrument reasonably believed by BTC to be genuine or bearing the signature of a person or persons reasonably believed by BTC to be genuine or bearing the signature of a person or persons reasonably believed to be authorized to sign, countersign or execute the same, shall be presumed to have been taken or omitted in good faith.
(c) BTC shall indemnify and hold harmless the Company and each Fund, its Board of Trustees or Board of Directors (as applicable) and its agents, BFA and any investment adviser for the Funds from any and all loss, liability, costs, damages, actions, and claims (Loss) to the extent that any such Loss arises out of the material breach of this Agreement by or negligent acts or omissions, bad faith or willful misconduct of BTC, its officers, directors or employees or any of its agents or subcustodians in connection with the Securities lending activities undertaken pursuant to this Agreement, provided that BTCs indemnification obligation with respect to the acts or omissions of its subcustodians shall not exceed the indemnification provided by the applicable subcustodian to BTC.
(d) Prior to lending on behalf of any Fund, BTC shall have obtained a Guaranty and Indemnity from BlackRock, Inc. or another entity, the creditworthiness of which is reasonably satisfactory to the Board of Trustees or Board of Directors (as applicable) of the Company, in favor of such Fund or Funds. Upon the termination of that guaranty, BTC shall obtain, and bear the costs of obtaining, a guaranty from BlackRock, Inc. or another entity, the
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creditworthiness of which is reasonably satisfactory to the Board of Trustees or Board of Directors (as applicable) of the Company, pursuant to which the guarantor will indemnify the Funds for losses due to a Borrower default on terms that are consistent in all material respects with the existing Guaranty and Indemnity by BlackRock, Inc. The Funds and/or Company, at their expense, may obtain further indemnification against losses due to a Borrower default from a third party to which BTC is not a party.
5.2 No Obligation to Inquire. Without limiting the generality of the foregoing, BTC shall be under no obligation to inquire into, and shall not be liable for, the validity of the issue of any Securities or Approved Investments credited to any Account or Collateral Account.
5.3 Advice of Counsel. BTC may, with respect to questions of law, apply for and obtain the advice and opinion of counsel which may be counsel to the Company, provided that the foregoing shall not be deemed to be a waiver by the Company of any conflict of such counsel.
5.4 No Collection Obligations. BTC shall be under no obligation or duty to take action to effect collection from the issuer of any amounts payable in respect of Securities or Approved Investments if the issuer of such Securities or Approved Investments is in default, or if payment is refused after due demand and presentation.
5.5 Pricing Methods. BTC is authorized to utilize any recognized pricing information service or any other means of valuation specified in the applicable Securities Lending Agreement (Pricing Methods) in order to perform its valuation responsibilities with respect to loaned Securities, Collateral and Approved Investments, and the Fund agrees to hold BTC harmless from and against any loss or damage suffered or incurred as a result of errors or omissions of any such Pricing Methods.
5.6 BTCs Fee as Securities Lending Agent, etc.
(a) (i) In the case of a Fund identified as a Fund of Funds in accordance with the methodology agreed between BTC and the Company, in connection with each Securities loan hereunder, the Fund shall, subject to Section 5.6(a)(ii) and 5.6(f), pay to BTC a percentage (the BTC Fund of Funds Fee Percentage) of Lending Income (as defined herein). As used herein, Lending Income means (A) amounts earned from securities lending activities (for the avoidance of doubt, prior to payment of compensation to BTC), consisting of income earned on the investment and reinvestment of Cash Collateral plus any Securities Loan Fees paid by the Borrowers after deducting (B) the sum of (x) any Rebate due to the Borrowers under the applicable Securities Lending Agreement with the Borrowers and (y) applicable Cash Management Costs, if any. BTC has agreed to cap Cash Management Costs on an annualized basis to 0.04% of the daily value of the Cash Collateral; such cap, which may be raised or reduced upon mutual agreement between BTC and the Board of the Company, may be effected through caps of expenses incurred by a joint account, fund or similar vehicle in which Cash Collateral is invested or, to the extent such cap does not reduce Cash Management Costs to the agreed-upon percentage, through a waiver of fees received by BTC pursuant to this Agreement. The BTC Fund of Funds Fee Percentage shall be such percentage as may from time to time be agreed upon by the Board of the Company and BTC and shall be set forth in writing. Effective
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as of January 1, 2022, the BTC Fund of Funds Fee Percentage is eighteen percent (18%); provided, however, that if at any point during a calendar year, the sum of the (A) Lending Income earned by a Fund and the other Funds in the Lending Complex from the lending of their securities plus (B) aggregate Cash Management Costs paid by the Fund and the other Funds in the Lending Complex (collectively, the Aggregate Lending Income and Cash Management Costs), exceeds $540,000,000 (the iShares Complex Breakpoint), from the next Business Day after the date that the Aggregate Lending Income and Cash Management Costs exceeds the iShares Complex Breakpoint until December 31 of such calendar year, the BTC Fund of Funds Fee Percentage shall be reduced to fifteen percent (15%).
(ii) Notwithstanding the provisions of Section 5.6(a)(i), for any Fund that has been identified as a Fund of Funds, if the fee calculated pursuant to such Section 5.6(a)(i) would result in an effective fee split for the Fund of less than seventy percent (70%) of the sum of the relevant Funds Lending Income and the applicable Cash Management Costs for any day (the Fund of Funds Effective Fee Split Floor), then BTCs fees for such day shall be reduced to the extent necessary to provide the relevant Fund with the Fund of Funds Effective Fee Split Floor.
(b) (i) In the case of a Fund identified as a US Equity Fund in accordance with the methodology agreed between BTC and the Company, in connection with each Securities loan hereunder, the Fund shall, subject to Section 5.6(b)(ii) and 5.6(f), pay to BTC a percentage (the BTC US Equity Fee Percentage) of the Lending Income. BTC has agreed to cap Cash Management Costs on an annualized basis to 0.04% of the daily value of the Cash Collateral; such cap, which may be raised or reduced upon mutual agreement between BTC and the Board of the Company, may be effected through caps of expenses incurred by a joint account, fund or similar vehicle in which Cash Collateral is invested or, to the extent such cap does not reduce Cash Management Costs to the agreed-upon percentage, through a waiver of fees received by BTC pursuant to this Agreement. The BTC US Equity Fee Percentage shall be such percentage as may from time to time be agreed upon by the Board of the Company and BTC and shall be set forth in writing. Effective as of January 1, 2022, the BTC US Equity Fee Percentage is nineteen percent (19%); if at any point during a calendar year, the Aggregate Lending Income and Cash Management Costs exceeds the iShares Complex Breakpoint, from the next Business Day after the date that the Aggregate Lending Income and Cash Management Costs exceeds the iShares Complex Breakpoint until December 31 of such calendar year, the BTC US Equity Fee Percentage shall remain equal to nineteen percent (19%).
(ii) Notwithstanding the provisions of Section 5.6(b)(i), for any Fund that has been identified as a US Equity Fund, if the fee calculated pursuant to such Section 5.6(b)(i) would result in an effective fee split for the Fund of less than seventy percent (70%) of the sum of the relevant Funds Lending Income and the applicable Cash Management Costs for any day (the US Equity Effective Fee Split Floor), then BTCs fees for such day shall be reduced to the extent necessary to provide the relevant Fund with the US Equity Effective Fee Split Floor.
(c) (i) In the case of a Fund identified as an International Equity Fund in accordance with the methodology agreed between BTC and the Company, in connection with each Securities loan hereunder, the Fund shall, subject to Section 5.6(c)(ii) and 5.6(f), pay to BTC a percentage (the BTC International Equity Fee Percentage) of the Lending Income. BTC has agreed to cap Cash Management Costs on an annualized basis to 0.04% of the daily
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value of the Cash Collateral; such cap, which may be raised or reduced upon mutual agreement between BTC and the Board of the Trust, may be effected through caps of expenses incurred by a joint account, fund or similar vehicle in which Cash Collateral is invested or, to the extent such cap does not reduce Cash Management Costs to the agreed-upon percentage, through a waiver of fees received by BTC pursuant to this Agreement. The BTC International Equity Fee Percentage shall be such percentage as may from time to time be agreed upon by the Board of the Company and BTC and shall be set forth in writing. Effective as of January 1, 2022, the BTC International Equity Fee Percentage is eighteen percent (18%); provided, however, if at any point during a calendar year, the Aggregate Lending Income and Cash Management Costs exceeds the iShares Complex Breakpoint, from the next Business Day after the date that the Aggregate Lending Income and Cash Management Costs exceeds the iShares Complex Breakpoint until December 31 of such calendar year, the BTC International Equity Fee Percentage shall be reduced to fifteen percent (15%).
(ii) Notwithstanding the provisions of Section 5.6(c)(i), for any Fund that has been identified as an International Equity Fund, if the fee calculated pursuant to such Section 5.6(c)(i) would result in an effective fee split for the Fund of less than seventy percent (70%) of the sum of the relevant Funds Lending Income and the applicable Cash Management Costs for any day (the International Equity Effective Fee Split Floor), then BTCs fees for such day shall be reduced to the extent necessary to provide the relevant Fund with the International Equity Effective Fee Split Floor.
(d) (i) In the case of a Fund identified as a Fixed Income Fund in accordance with the methodology agreed between BTC and the Company, in connection with each Securities loan hereunder, the Fund shall, subject to Section 5.6(d)(ii) and 5.6(f), pay to BTC a percentage (the BTC Fixed Income Fee Percentage) of the Lending Income. BTC has agreed to cap Cash Management Costs on an annualized basis to 0.04% of the daily value of the Cash Collateral; such cap, which may be raised or reduced upon mutual agreement between BTC and the Board of the Trust, may be effected through caps of expenses incurred by a joint account, fund or similar vehicle in which Cash Collateral is invested or, to the extent such cap does not reduce Cash Management Costs to the agreed-upon percentage, through a waiver of fees received by BTC pursuant to this Agreement. The BTC Fixed Income Fee Percentage shall be such percentage as may from time to time be agreed upon by the Board of the Company and BTC and shall be set forth in writing. Effective as of January 1, 2022, the BTC Fixed Income Fee Percentage is eighteen (18%); provided, however, that if at any point during a calendar year, the Aggregate Lending Income and Cash Management Costs exceeds the iShares Complex Breakpoint, from the next Business Day after the date that the Aggregate Lending Income and Cash Management Costs exceeds the iShares Complex Breakpoint until December 31 of such calendar year, the BTC Fixed Income Fee Percentage shall be reduced to fifteen percent (15%).
(ii) Notwithstanding the provisions of Section 5.6(d)(i), for any Fund that has been identified as a Fixed Income Fund, if the fee calculated pursuant to such Section 5.6(d)(i) would result in an effective fee split for the Fund of less than seventy percent (70%) of the sum of the relevant Funds Lending Income and the applicable Cash Management Costs for any day (Fixed Income Effective Fee Split Floor), then BTCs fees for such day shall be reduced to the extent necessary to provide the relevant Fund with the Fixed Income Effective Fee Split Floor.
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(e) BTC is authorized on a monthly basis to charge the fee owed to it by a Fund under this Section 5.6 against the applicable Account. Such fee shall be charged and paid at the end of each month. Subject to Section 5.6(f), BTC shall simultaneously therewith direct the Custodian to pay to the applicable Fund the net amount earned from Securities lending activities, as described in Sections 5.6(a)(i) through 5.6(d)(ii), that is not paid to BTC as its fee.
(f) BTC shall be responsible for all transaction fees and all other operational costs relating to Securities lending activities, other than Cash Management Costs to the extent borne by the Fund as provided in Sections 5.6(a), 5.6(b), 5.6(c) and 5.6(d) above, as applicable, and extraordinary expenses (e.g., litigation and indemnification expenses), each to be borne by the respective Fund.
5.7 Reliance on Certificates and Instructions. The Company agrees to furnish to BTC a new Certificate whenever any then Authorized Person ceases to be an Authorized Person or additional Authorized Persons are appointed and authorized. BTC shall be entitled to rely, and shall be fully protected in acting, upon any Certificate, any information contained on any schedule hereto as may be amended in accordance with the terms hereof, and any Written or Oral Instruction actually received by BTC and reasonably believed by BTC to be duly authorized and delivered. The Company agrees to forward to BTC Written Instructions confirming Oral Instructions in such manner so that such Written Instructions are received by BTC by the close of business of the same day that such Oral Instructions are given to BTC. The Company agrees that the fact that such confirming Written Instructions are not received on a timely basis or that contrary instructions are received by BTC shall in no way affect the validity or enforceability of the transactions authorized by the Company. BTC shall use reasonable efforts to report any subsequently received contrary instructions. In this regard, the records of BTC shall be presumed to reflect accurately any Oral Instructions given by an Authorized Person or a person reasonably believed by BTC to be an Authorized Person.
5.8 Disclosure of Information. BTC may not disclose or supply any information regarding the Company or Fund unless required by any law or governmental regulation now or hereafter in effect or requested to do so by Company; provided that BTC may disclose or supply information regarding the Company and/or Fund and any transactions authorized by this Agreement as necessary in the sole discretion of BTC in order to facilitate, effect or continue any Securities loans hereunder or to assist in the analysis of the performance of the Securities lending program.
5.9 Reports. BTC shall furnish the Company and the Fund with reports relating to loans hereunder and other information requested by the Company and shall provide such reports to the Companys Board of Trustees or Board of Directors (as applicable) upon request or as may be required by the Securities Lending Guidelines.
5.10 Force Majeure. Notwithstanding anything to the contrary in this Agreement, in no event shall a party to this Agreement be liable to the other party or any third party for losses resulting from (i) any acts of God, fires, floods, or other disturbances of nature, epidemics, strikes, riots, nationalization, expropriation, currency restrictions, terrorist activity, or insurrection, or (ii) other happenings or events beyond the reasonable control or anticipation of the party affected, provided that (A) the affected party has in place appropriate business continuity procedures, systems and facilities and (B) the affected party uses its best efforts to avoid or remove the cause of such losses.
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5.11 No Implied Duties.
(a) BTC shall have no duties or responsibilities whatsoever except such duties and responsibilities as are specifically set forth in this Agreement and in the applicable Securities Lending Agreement, and no covenant or obligation shall be implied against BTC in connection with this Agreement.
(b) Neither the Company nor any Fund shall have any duties or responsibilities whatsoever except such duties and responsibilities as are specifically set forth in this Agreement, and no covenant or obligation shall be implied against the Company or any Fund in connection with this Agreement.
(c) Nothing in this Agreement shall be understood to imply that in performing the functions described herein, BTC is acting in the capacity of an investment adviser or is providing advice as to the value of Securities or as to the advisability of investing in, purchasing, or selling Securities.
6. Termination.
6.1 Termination. This Agreement may be terminated at any time with respect to one or more Funds by either party upon delivery to the other party of a written notice specifying the date of such termination, which shall be not less than 60 days after the date of receipt of such notice.
6.2 Cooperation. Both parties shall take all commercially reasonable steps to cooperate to provide a smooth transition in the event of a termination.
6.3 Termination of Loans, etc. upon Termination of Agreement. Notwithstanding any such notice, this Agreement shall continue in full force and effect with respect to any loans of Securities that remain outstanding as of the date of termination; provided, however, that BTC shall promptly terminate all loans of Securities made pursuant to this Agreement and shall not make any further loans of Securities pursuant to this Agreement.
7. Miscellaneous.
7.1 Exclusivity. During the term of this Agreement, the Company agrees that it shall not enter into any other agreement with any third party whereby such third party is permitted to make loans on behalf of any Fund of any Securities held by BTC in an Account from time to time; provided, however, that nothing in this provision shall prevent the Company from terminating this Agreement and/or hiring a securities lending agent other than BTC. The parties agree that this provision does not prohibit the Company from maintaining this Agreement during any transition period to another securities lending agent.
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7.2 Notices.
(a) Any notice or other instrument in writing, authorized or required by this Agreement to be given to BTC, shall be sufficiently given if addressed to BTC and received by it at its offices at 400 Howard Street, San Francisco, CA 94105, Attention: Securities Lending Department, with a copy to the General Counsel or at such other place as BTC may from time to time designate in writing.
(b) Any notice or other instrument in writing, authorized or required by this Agreement to be given to the Company shall be sufficiently given if addressed to the Fund and/or Company and received by - Mutual Fund Administration, c/o BlackRock Fund Advisors, 400 Howard Street, San Francisco, California 94105, with a copy to: Legal Department, or at such other place as the Company may from time to time designate in writing.
7.3 Cumulative Rights and No Waiver. Each and every right granted to a party hereunder or under any other document delivered hereunder or in connection herewith, or allowed it by law or equity, shall be cumulative and may be exercised from time to time. No failure on the part of a party to exercise, and no delay in exercising, any right shall operate as a waiver thereof, nor shall any single or partial exercise by a party of any right preclude any other or future exercise thereof or the exercise of any other right.
7.4 Severability. In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations shall not in any way be affected or impaired thereby, and if any provision is inapplicable to any person or circumstances, it shall nevertheless remain applicable to all other persons and circumstances.
7.5 Amendments. This Agreement may not be amended or modified in any manner except by a written agreement executed by all parties.
7.6 Successors and Assigns. This Agreement shall extend to and shall be binding upon the parties hereto, and their respective successors and assigns; provided, however, that this Agreement shall not be assignable by either party without the written consent of the other.
7.7 Governing Law. This Agreement shall be construed in accordance with the laws of the State of California without regard to conflict of laws principles thereof.
7.8 No Third Party Beneficiaries. In performing hereunder, BTC is acting solely on behalf of the Company and, except as specifically provided herein, no contractual or service relationship shall be deemed to be established hereby between BTC and any other person.
7.9 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute only one instrument.
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7.10 SIPA Notice. THE PARTIES ACKNOWLEDGE THAT THE PROVISIONS OF THE SECURITIES INVESTOR PROTECTION ACT OF 1970 (SIPA) OR THE DODD-FRANK ACT OF 2010 (DFA) MAY NOT PROTECT THE FUND WITH RESPECT TO THE SECURITIES LOAN TRANSACTION AND THAT, THEREFORE, THE COLLATERAL DELIVERED BY AN APPROVED BORROWER TO THE FUND MAY CONSTITUTE THE ONLY SOURCE OF SATISFACTION OF THE OBLIGATION OF THE APPROVED BORROWER IN THE EVENT THE APPROVED BORROWER (OR ITS AGENT) FAILS TO RETURN THE SECURITIES. BTC SHALL NOT BE RESPONSIBLE FOR ANY LOSSES INCURRED OR LIABILITIES WHICH ARISE SOLELY DUE TO THE APPLICATION OF SIPA OR DFA TO THE SECURITIES LENDING TRANSACTIONS DESCRIBED HEREIN.
7.11 Survival of Indemnification. The indemnifications provided by a party hereunder shall be a continuing obligation of such party, its successors and assigns, notwithstanding the termination of any loans hereunder or of this Agreement.
7.12 No Personal Liability. It is understood and agreed that none of the shareholders, officers, agents, Directors or Trustees (as applicable) of the Company or any Fund shall be personally liable hereunder. All persons contracting with or having a claim against the Company with respect to a Fund shall look solely to the assets of such Fund for payment of such contract or claim, and no Fund shall be liable for the obligations of any other Fund.
7.13 Separate Agreement. Execution of this Agreement by more than one Company or on behalf of more than one Fund shall not create any contractual or other obligation between or among such Companies or Funds, and this Agreement shall constitute a separate agreement and between BTC and each Company on behalf of each respective Fund. Every reference to a Company or Fund shall be construed to be a reference solely to the particular Company or Fund that is a party to the relevant transaction. Each of the parties agrees that under no circumstances shall any rights, obligations, remedies or liabilities of a particular Company or Fund, or with respect to transactions to which a particular Company or Fund is a party, be deemed to constitute rights, obligations, remedies or liabilities applicable to any other Company or Fund or to transactions to which other Companies or Funds are parties, and BTC shall have no right to set off claims of any Company or Fund against property or liabilities of any other Company or Fund. All transactions are entered into in reliance on the fact that this Agreement constitutes a separate agreement between BTC and the Company or Fund.
[End of Text]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers, thereunto duly authorized, as of the day and year first above written.
iSHARES, INC. | ||
By: |
/s/ Trent Walker |
|
Name: Trent Walker | ||
Title: Treasurer and Chief Financial Officer | ||
iSHARES TRUST | ||
By: |
/s/ Trent Walker |
|
Name: Trent Walker | ||
Title: Treasurer and Chief Financial Officer | ||
iSHARES U.S. ETF COMPANY, INC. | ||
By: |
/s/ Trent Walker |
|
Name: Trent Walker | ||
Title: Treasurer and Chief Financial Officer | ||
iSHARES U.S. ETF TRUST | ||
By: |
/s/ Trent Walker |
|
Name: Trent Walker | ||
Title: Treasurer and Chief Financial Officer |
BLACKROCK INSTITUTIONAL TRUST COMPANY, N.A. | ||
By: |
/s/ Jason Strofs |
|
Name: Jason Strofs | ||
Title: Managing Director |
Approved by the Board of Trustees of iShares Trust, the Board of Directors of iShares, Inc., the Board of Directors of iShares U.S. ETF Company, Inc., and the Board of Trustees of iShares U.S. ETF Trust as of January 1, 2022.
[Signature page to Securities Lending Agency Agreement]
Schedule A
[List of Funds on File with BFA]
Exhibit A
[Forms of Securities Lending Agreements]