IMPORTANT NOTICE ON THE TRANSLATION OF THIS PROSPECTUS

Transcription

1 IMPORTANT NOTICE ON THE TRANSLATION OF THIS PROSPECTUS This is an unofficial translation/abstract and should be used solely for reference purposes. If there is any discrepancy between this translation and the Japanese original, the latter shall prevail. This English translation is not required by law or any regulation applicable to BlackRock Japan Co., Ltd. ( The Company ). There is no guarantee that this translation will be updated in correspondence with the Japanese version. The information in this document is directed only at persons within Japan and is not directed at nor intended for use or distribution to persons in any jurisdiction in which this investment product is not authorised for distribution or where the dissemination of information regarding this investment product is not permitted. The Company has registered the fund in accordance with relevant laws and regulations in Japan. Registration with the Government of Japan is intended for residents of Japan and is not intended for distribution to, or use by, any person or entity from any other jurisdictions. All information contained herein has been prepared by the Company for informational or educational purposes only and it does not constitute a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The Company makes no representation, express or implied, that this translation is accurate or complete. The Company does not accept any responsibility whatsoever for any loss arising from any reliance on or action taken (or omission to take action) by any person using this translation. The Company reserves the right to change, modify, add or remove portions of this translation at any time for any reason. Such changes may be made without notice.

2 EXHIBIT A ishares Core TOPIX ETF Open-Type Investment Trust, Domestic, Equity, ETF, Index Type Explanatory Booklet on the Investment Trust (Mandatory Prospectus) November 10, 2016 * This booklet is a prospectus pursuant to the provisions of Article 13 of the Financial Instruments and Exchange Act. - In connection with the solicitation of ishares Core TOPIX ETF (the Fund ), the management company filed a securities registration statement with the Director General of the Kanto Local Finance Bureau on November 9, 2016 pursuant to the provisions of Article 5 of the Financial Instruments and Exchange Act (Law No. 25 of 1948). The filing took effect on November 10, The Fund s explanatory booklet on the investment trust (Prospectus on request) is available via the website of the management company. It is also available from an authorised participant upon request. In case you request it, please keep a personal record of that fact. - The complete terms and conditions of this investment trust fund are attached to the explanatory booklet on the investment trust (Prospectus on request). - In case a significant change is made to the content of the Fund, the intentions of unitholders will be confirmed in advance in accordance with the Act on Investment Trust and Investment Corporations (Law No. 198 of 1951). - The investment trust fund assets are separately managed by the trustee in accordance with the Trust Act. 1

3 Unit-Type/ Open-Type Product Classification Investment Area Investment Assets Independent Category (Source of Income) Supplementary Classification Investment Assets Attribute Category Frequency of Investment Account Area Settlement Target Index Open-Type Investment Japanese Domestic Equity ETF Index Type Equities in Trust * Please refer to the website of the Investment Trusts Association, Japan ( regarding the definitions relating to product classification and attribute categories. general Twice a year Japan TOPIX Management Company (person giving instructions for fund management) BlackRock Japan Co., Ltd. - Registered as a financial instruments firm with Director General of the Kanto Local Finance Bureau (Kinsho) No Date established: March 11, Paid-in Capital: 2,435 million yen - Total net asset value of investment trusts under management: 4,247.7 billion yen (as of August 31, 2016) <Detailed information about the Fund> - Please contact us if you need detailed information about the Fund. Phone: (9:00 to 17:00, business days) Website: Trustee (person responsible for custody and management of Fund assets) Mitsubishi UFJ Trust and Banking Corporation Please read this document carefully before deciding to purchase units of the Fund. 2

4 Objective and Characteristics of the Fund Objective of the Fund ishares Core TOPIX ETF aims to achieve a Net Asset Value per unit of the Fund ( NAV ) that closely corresponds to the movement of the Tokyo Stock Exchange Stock Price Index (TOPIX) by investing mainly in shares of the stocks constituting and determined to constitute the Tokyo Stock Exchange Stock Price Index (TOPIX) (the Index or the Benchmark ). Characteristics of the Fund While the Fund is an open-type equity investment trust, its concept is to physicalise Index by utilising functions of an investment trust. Its product design is different from other ordinary investment trusts from the following viewpoints. 1. Units of the Fund ( Units ) are listed on the Tokyo Stock Exchange. Units of the Fund can be traded at any time on the TSE. Units may be traded in blocks of 1 unit. Type 1 financial instruments firms engaged in trading may determine their trading commissions using multipliers that they decide on their own. The method of trading is the same as that of equity trading. For further information, please contact type 1 financial instruments business firm who are the members of the TSE. 2. The minimum number of units is limited to an additional creation or redemption. Additional creation and redemption are limited to those for amounts required at least to create a portfolio reflecting the Index so that the Fund s performance can closely correspond to the movement of the Index. Additional creation and redemption are done by unit called a creation unit. The creation unit is a unit displayed by the number of Units that the management company determines to create and redeem these rights. The management company also determines the number of Units corresponding to one creation unit every business day. 3. The constituent stocks of the Index may be used for additional creation and redemption. Stocks constituting the Index (the Index ETF Constituent Stocks ), as well as cash, which are necessary for the creation or redemption of one creation unit, are determined by the management company as a portfolio composition file (the PCF ), and presented to authorised participants. If the Fund s market price of Unit on the stock exchange deviates from its NAV, smooth price formulation on the stock exchange can be expected with reasonable arbitration that can shrink such deviation. *The authorised participants shall be the type I financial instruments firms that are designated by the management company as persons to apply for the creation of the Units and the redemption. (A) Additional creation Investors may create Units by contributing Index ETF Constituent Stocks and cash as provided for in the PCF. If an investor is an issuer of shares constituting Index ETF Constituent Stocks, an amount equivalent to the total market value of such stocks included in the total market value of Index ETF Constituent Stocks, as well as an amount equivalent to expenses necessary to acquire such stocks as trust assets (up to 0.2% of such total market value), will be paid to the authorised participants in cash, instead of such stocks. (B) Redemption Investors who own more than certain number of Units may redeem them in exchange for an equivalent amount of Index ETF Constituent Stocks included in trust assets. The Fund may conduct stock lending. In this case, the Fund shall delegate authority to BlackRock Institutional Trust Company, N.A. in whole or in part to give instructions in respect of stock lending. Investment Management Structure - Fund investment, management, and relevant roles are separated under the internal rules. - The management company s investment management division controls the Fund s investment management. - The management company has established an internal audit division, as well as a division giving feedback to relevant divisions after monitoring fund investment statuses, risk conditions and others. It has also established a section (function) to confirm whether investments are made in accordance with the investment policy of each fund. Such confirmation is conducted by holding Investment Committee Meetings, etc. 3

5 - The Stock Index Investment Division (approximately 4 persons) will be responsible for this Fund. * The Fund s investment management structure may be changed in the future. Investment Restrictions In principle, the ratio of investment in assets other than stocks shall be less than 50% of the total amount of the trust property. In principle, no investment will be made in assets denominated in foreign currencies. Distribution Policy In principle, the aggregate of dividend income (meaning the dividends, fees for loan securities and other similar incomeless interest on payments) after deduction of the expenses is distributed semiannually at the end of each financial period (February 9 and August 9, in principle). However, such distribution in the future, as well as its amount, is not guaranteed. 4

6 Investment Risk Factors that contribute to fluctuations in the NAV of the Fund The NAV of the Fund is affected by the fluctuations of the invested securities held for the account of the Fund. All profits and losses arising from investment management of these trust asset investments are attributed to the investors. Accordingly, the principal amount of the Fund and profits arising from these investments are not guaranteed. Investors may incur a loss and the value of their investment principal may fall below its original principal amount as the result of a decline in the NAV. Investment trusts are different from bank deposits. The Fund s major risks are as follows: - Risk of Investing in Domestic Equity Securities The Fund primarily invests in common stocks of companies based in Japan. Accordingly, the performance of the Fund is affected by fluctuations in stock prices and the amounts of dividends received from the issuers that are influenced by Japanese economic and market conditions as well as their management and financial situations. - Securities Lending Risk Lending of securities involves counterparty risk, which is the risk of contractual default by the counterparty due to its insolvency or other events, and the Fund may suffer losses in such cases. Other considerations The provision stipulated in Article 37-6 of the Financial Instruments and Exchange Act ( cooling-off period ) is not applicable to the Fund s transactions. Considerations regarding profit distribution - Distribution is paid out of the Fund s net assets and is different from interest earned on bank deposits. Thus, the Fund s NAV declines by the distribution amount when it pays out distribution. - The distribution amount is not always the same as income earned by the Fund during each financial period. Risk Management Framework The management company places an emphasis on risk oversight, and risks are managed using its proprietary system. More specifically, Fund s investment risk is measured and analysed, and investment restrictions are monitored by an independent risk management department. This department confirms that the Fund s investment risk profile meets the investment guideline, and gives feedback to investment teams and other relevant departments, with internal sharing of relevant results. Additionally, the management company s operational risks are clearly defined in operational guidelines, and managed accordingly. 5

7 (Reference Information) Comparison of the Fund with other representative asset classes in terms of percentage changes 80.0 (%) (September2011 to August 2016) 47.4 Maximum percentage change Minimum percentage change Average percentage change Annual percentage change and dividend-included NAV of the Fund (September 2011 to August 2016) (yen) 350, , ,000 Annual percentage change of fund Annual percentage change of benchmark Dividend-included NAV (%) , , the Fund Japanese equity Developed country equity Emerging country equity 0.5 JGBs Developed country bond Emerging country bond 100,000 50, / / / / / * The above graph represents the annual average, maximum and minimum percentage changes at the end of each month during the five years between September 2011 and August 2016 for the Fund and other representative asset classes. The percentage changes for the Fund are calculated on assumption that the amount of distribution before tax is reinvested and may differ from the annual percentage change calculated based on the actual NAV. Because the establishment date of the Fund is October 19, 2015, the percentage changes for the Fund are calculated based on the value of the benchmark and differ from the actual results of the Fund. * Not every asset class may be the investment target of the Fund. * Index of each asset class Japanese equity: Tokyo Stock Price Index (TOPIX Total Return) Developed country equity: MSCI Kokusai Index (Total Return, Yen based) Emerging country equity: MSCI Emerging Markets Index (Total Return, Yen based) Japanese government bond: Nomura Bond Performance Index Government Developed country bond: Citi World Government Bond Index (excluding Japan, Yen based) Emerging country bond: J.P. Morgan Government Bond Index- Emerging Markets Global Diversified Index (Yen based) (Note) Foreign indexes are yen-based, assuming investments with no currency hedge. * The above graph illustrates the amount and percentage changes of dividend-included NAV as at each month-end of the year during a fiveyear period between September 2011 and August Because the annual percentage change shows the annual percentage changes of the benchmark, it is not the actual results of the Fund. The above graph illustrates the dividend-inclusive NAV for the period from the end of October 2015 to the end of August * The dividend-included NAV is calculated on assumption that the amount of distribution before tax is reinvested and may differ from the actual NAV. <Indexes> TOPIX (Total Return) is a benchmark calculated based on the total market capitalisation of all issues listed on the first section of the Tokyo Stock Exchange. TOPIX (Total Return) is an intellectual property of the Tokyo Stock Exchange, and all rights pertaining to this stock price index, including the index calculation and publication and use of the figures belong to the Tokyo Stock Exchange. The Tokyo Stock Exchange also holds the right to change the method of calculation or publication of TOPIX (Total Return), to terminate the method of calculation or publication of TOPIX (Total Return) or to change or terminate the use of trademark of TOPIX (Total Return). The MSCI Kokusai Index (Total Return, Yen based) and MSCI Emerging Markets Index (Total Return, Yen based) are benchmarks developed and calculated by MSCI Inc. The MSCI Kokusai Index (Total Return, Yen based) is an index which benchmarks the stock performance of developed countries of the world excluding Japan while the MSCI Emerging Markets Index (Total Return, Yen based) is an index which benchmarks the stock performance of emerging countries. The copyrights, intellectual property rights and all other rights concerning these indexes belong to MSCI Inc. In addition, MSCI Inc. holds the right to amend the content of each index and the right to terminate publication of these indexes. Nomura Bond Performance Index Government is an index published by Nomura Securities Co., Ltd. to measure the movements of Japanese government bonds and is calculated with the return on investment of a portfolio. The intellectual property right concerning this index belongs to Nomura Securities Co., Ltd. Note that Nomura Securities Co., Ltd. does not guarantee the accuracy, completeness, reliability and effectiveness of Nomura Bond Performance Index Government and bears no responsibility whatsoever on business activities and services implemented by BlackRock Japan Co., Ltd. using the index. The Citi World Government Bond Index (excluding Japan, Yen based) is a bond index published by Citigroup Index LLC for benchmarking the 6

8 overall investment return on government bonds of the world s major countries excluding Japan. The copyright, trademark right, intellectual property right and all other rights concerning this index belong to Citigroup Index LLC. The J.P. Morgan Government Bond Index-Emerging Markets Global Diversified Index (Yen based) is published by J.P. Morgan Securities LLC and is calculated to track local currency bonds issued by emerging market governments. The copyright concerning this index belongs to J.P. Morgan Securities LLC. 7

9 Past Performance Changes in NAV and Net Assets (yen) 200, ,000 As of August 31, 2016 (bil. yen) 1, ,000 Total net asset value (right axis) 50,000 NAV (without distribution; left axis) Benchmark (left axis) 0 15/10 15/11 15/12 16/1 16/2 16/3 16/4 16/5 16/6 16/7 16/ * The NAV figures are those after deduction of the trust fee. For the trust fee, please refer to Expenses of Fund below. The benchmark figures shown are multiplied by 100. Changes in Distributions Cumulative total since creation 2,000 yen FY1 August ,000 yen *Distributions are the amount per unit net of tax. Status of major assets Top 10 stocks incorporated (10%) Name of stocks Business Ratio 1 Toyota Motor Transport machinery Mitsubishi UFJ Financial Banking 2.3 Group 3 SoftBank Group Information and telecommunication Nippon Telegraph and 1.7 Information and telecommunication Telephone 5 KDDI Information and telecommunication Honda Motor Transport machinery Sumitomo Mitsui Financial 1.4 Banking Group 8 Mizuho Financial Group Banking Japan Tobacco Food Sony Electrical equipment 1.2 Changes in Annual Rates of Return * The rates of return of the Fund are calculated based on the NAV (without distribution). * The rates for the period from 2006 to 2014 shows the annual rates of return. * In 2015, the rate of return shows the rate from the creation date (October 19) to the end of the same year, and the 8

10 benchmark shows the rates from the beginning to the end of each year. 80% 60% 40% 20% 0% -20% -40% -60% 51.5% 18.0% 1.9% 5.6% -1.0% 8.1% 9.9% 2.9% -12.2% -18.9% Fund -41.8% Benchmark FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 * Past performance, data, etc. are those as of the preparation date, or past performance, data, etc., and do not guarantee future results. * Benchmarks are provided for reference purposes only, and do not represent the Fund s performance results. * The status of investment by the Fund is separately disclosed on the website of the management company. 9

11 Procedures, Fees and Other Items Application Memo Creation unit Creation Price Delivery (settlement) of creation basket Amount per share on inception date Redemption Unit Redemption Price Delivery (settlement) of redemption basket Application Cutoff Time Creation Application Period Days on which Creation and Redemption Applications are not accepted One Creation unit or its integral multiples thereof NAV on the day a creation application is accepted The Net Asset Value per Unit of the Fund is indicated on a per 100 Unit basis. Investors create Units with Index ETF Constituent Stocks and cash as stipulated in the PCF. The management company shall present a PCF to the Authorised Participants on a business day immediately preceding the day a creation application is accepted. Delivery of Index ETF Constituent Stocks and cash by the date designated by Authorised Participant in accordance with the creation application The amount per share on the inception date will be 1,506 yen per Unit. One creation unit* or its integral multiples thereof. NAV on the day a redemption application is accepted Trust assets invested in stocks that are stocks equivalent in value to the Units subject to the request for redemption are delivered to investors. The management company shall present the stocks to be delivered (PCF) to the Authorised Participants on a business day immediately preceding a Units redemption request acceptance date. Trust assets invested in stocks are generally delivered to Authorised Participants or others requesting the redemption from the fourth business day after the acceptance date of redemption application. 15:00 Japan Standard Time on the creation application date or the acceptance date of redemption application * The application may not be canceled after the creation application is accepted by the management company. From November 10, 2016 to May 9, 2017 *The application period is renewed by way of the filing of a securities registration statement before the expiration of the above period. Applications for creation and redemption of Units may not be accepted on the following days and periods (as outlined in 1) through 8) below). 1) For a period of two business days, beginning two business days prior to the last day of the relevant financial period of the fund (record dates) (or, if such date falls on a holiday, for a period of three business days, beginning three business days prior to the account close date) 2) In the event that Management Company determines the Fund cannot be managed according to the Fund s investment policies provided in the Trust Deed due to unavoidable circumstances. 3) For a period of three business days, beginning one business day prior to the ex-dividend or ex-rights day of any Index ETF Constituent Stocks. 4) For a period of three business days, beginning one business day prior to the rebalance day for the Index ETF Constituent Stocks, or the day the number of stocks are changed. 5) For a period, beginning one business day prior to the delisting day (due to the share transfer and merger of any Index ETF Constituent Stocks) and ending one business day after the Index inclusion day for new shares (due to such transfer and merger). 6) On any day on which trading of Index ETF Constituent Stocks is suspended. 7) For a period of five business days prior to the date of termination, if the Fund terminates. 8) Any event other than in 1) through 7) above in which the Management Company determines the Fund s operations may be undermined due to unavoidable circumstances. 10

12 Suspension and Cancellation of Application for Creation and Redemption In cases where trading on the stock exchange is halted, settlement functions are suspended, circumstances are beyond the control of the Management Company, or the Management Company deems necessary, the Management Company may suspend and/or cancel the applications for creation and redemption of Units. Trust Period Indefinite Period (Established on October 19, 2015) Early Termination Record Dates Distribution Maximum Trust Assets Public Notification of Important Announcements Management Reports Tax Treatment The Management Company may terminate the trust early before the expiration of the trust term (early redemption) if it considers that the termination is beneficial to the investors, the number of Units is less than 3,000,000, or the circumstances beyond the Management Company s control necessitate. The trust may also be terminated if the Fund s units are delisted from all the stock exchanges they are listed, or if Index is discontinued. February 9 and August 9 of Each Year Distributions are paid twice a year in accordance with the Fund s distribution policy. Securities and cash that are equivalent to 10 trillion yen Public notice the management company issues to unitholders shall be posted on the website shown below by means of electronic notice: Management reports are not prepared and published. For tax purposes, the Fund is treated as a specified stock investment trust. Publicly-offered stock-type investment trusts are subject to the Nippon Individual Savings Account under tax laws. Tax credit for distributions and the exclusion from gross revenue applies. 11

13 Fund Expenses and Taxes Fund Expenses Expenses to be borne directly by investors Broker Commissions Authorised Participants may independently set charged on creation application commissions (including orders consumption taxes, etc.), and receive them from investors. Please contact your Authorised Participants for further information. Details of expenses Consideration for explanation of instruments at the time of subscription and administrative procedures relating to the creation Subscription/Redemp tion Charge Broker Commissions charged on redemption orders N/A - If an Authorised Participant receives a request for redemption or repurchase of Units from an investor, it may receive commissions (including consumption taxes, etc.) that it independently sets from the investor. Please contact your Authorised Participants for further information. Consideration for administrative procedures relating to the redemption (repurchase) Expenses to be borne indirectly by investors (i.e. expenses paid out of the Fund s assets) Management Fee - After the commencement date of the second (Trust Fee) fiscal year (August 10, 2016) The Fund s total net assets at an annual rate of %* (0.06% excluding taxes) or less *Management fees (trust fees) are paid out of the Fund s assets at the end of each fiscal year or at trust s termination. Breakdown of Management Fee Management Company Trustee Annual rate of % (0.045% excluding taxes) Annual rate of % (0.015% excluding taxes) Details of expenses - Management fees (trust fees) = NAV during the management term x trust fee ratio Consideration for fund management, calculation of the NAV, preparation of various documents, and other related services Consideration for administration of investment assets, execution of instructions received from the management company, and other related services Other Expenses and Fees The Fund s total net assets at the maximum annual rate of % (0.045% excluding taxes) are paid out of the Fund s assets for listing fees and usage fees of trademark of the Index at the end of each fiscal year or at trust s termination. Fund s costs and expenses, and brokerage commissions are paid out of the Fund s assets from time to time. If the Fund conducts stock lending, at most one half of the amounts of negative interest of per diem, which are proceeds of the Fund, will be paid to the entrusted company etc. as fees from 12 - Fund s costs and expenses: Auditing fees of the Fund s financial statements, taxes imposed on the trust assets, fees charged on fund management, and interests accrued on the amount paid by the trustee company in advance - Brokerage commissions: Commissions charged on

14 time to time. *Rates, maximum amounts, etc. of other expenses and fees are not shown in advance as they fluctuate with past performance and other factors. buy and sell orders of Fund s investment securities *The total amount of commissions, expenses, etc. of the Fund to be borne by investors varies depending on the holding period of the shares of the Fund. *Broker commissions charged on creation orders, exchange (purchase fees), management fees (trust fees), and other expenses and fees include consumption tax and local consumption tax. Taxes - Taxes are incurred as outlined below. - The following table shows withholding tax rates for individual investors, which may vary depending on taxation methods, etc. Transaction Item Tax Distribution Income tax and local tax Taxable as dividend income % of a distribution amount Taxable as capital gains Repurchase and Income tax and local tax % of capital gains on the Redemption repurchase and redemption *In the case that the Nippon Individual Savings Account (known as NISA ) is used: In the case of the use of NISA, the taxes on the dividend income and capital gains arising from the publicly-offered stock-type investment trusts and other instruments that are newly purchased up to a certain amount each year will be exempted for a certain period of time. A person who satisfies certain requirements such as opening of a tax-exemption account may use NISA. For the details thereof, including the amounts and periods eligible for tax exemption, please contact your type I financial instrument business firm. *Different tax rates are applicable to corporations. *Tax rates, etc. may be changed if tax laws are revised because the above tax rates are as of the last day of August It is recommended that investors consult tax professionals or equivalent persons regarding details of tax treatment. Copyright and other rights relating to the Tokyo Stock Exchange Stock Price Index (TOPIX) (1) The value of TOPIX and the trademark of TOPIX are intellectual properties of Tokyo Stock Exchange, Inc. ( TSE ), and all of the rights and knowhow relating to the method of calculation or publication of the value of TOPIX, and all of the rights relating the trademark of TOPIX, belong to TSE. (2) TSE may change the method of calculation or publication of the value of TOPIX, suspend calculation or publication of the value of TOPIX, or change or suspend the use of the trademark of TOPIX. (3) TSE does not guarantee or allude to the results that may arise from the use of the value of TOPIX or the trademark of TOPIX, or the value of TOPIX on a specified date. (4) TSE does not warrant the accuracy or completeness of the value of TOPIX or the data included therein. In addition, TSE is not responsible for any error, delay or suspension of the calculation or publication of the value of TOPIX. (5) This Fund is not provided, guaranteed or sold by TSE. (6) TSE is not obligated to give explanation of, or advise on investment in, this Fund to the purchasers of this Fund or to the public. (7) TSE will not factor the needs of BlackRock Japan Co., Ltd. or the purchasers of this Fund into the stock composition or computations by which the value of TOPIX is calculated. (8) Without limiting the foregoing, TSE is not liable for any damage arising from the issue, sale or purchase of this Fund. EXHIBIT B 13

15 ishares Core TOPIX ETF Open-End Investment Trust/Domestic/Shares/ETF/index-type *For tax purposes, the Fund is treated as a specified stock investment trust. Explanatory Booklet on the Investment Trust (Prospectus on Request) November 10, 2016 This booklet is a prospectus pursuant to the provisions of Article 13 of the Financial Instruments and Exchange Act. 14

16 1. In connection with the solicitation of ishares Core TOPIX ETF (the Fund ), the management company filed a securities registration statement with the Director General of the Kanto Local Finance Bureau on November 9, 2016 pursuant to the provisions of Article 5 of the Financial Instruments and Exchange Act (Act No. 25 of 1948). The filing took effect on November 10, The Net Asset Value per unit of the Fund is affected by the fluctuation of currency exchange rates, as well as that of the prices of securities that are included into the Fund, and all profits or losses arising out of the management shall be attributed to the investors. The principal is not guaranteed. 3. The Fund is not covered by the protection of the Deposit Insurance Corporation or Insurance Policyholder Protection Corporation. When the sales company is a registered financial institution, the Fund is not covered by Investor Protection Corporation. Issuer: BlackRock Japan Co., Ltd. Name and title of representative: President and Representative Director, Yoshiyuki Izawa Address of registered office: 8-3, Marunouchi 1-Chome, Chiyoda-ku, Tokyo Place at which a copy of the security registration statement is made available for inspection: Tokyo Stock Exchange (Address: 2-1 Nihonbashi-Kabutocho, Chuo-ku, Tokyo) 15

17 Part I. Securities Information (1) Name of the Fund ishares Core TOPIX ETF (the Fund ) (2) Type of Unit Certificate of Domestic Investment Trust, etc. The Units of the Fund are unit certificates of an open-end investment trust. The initial principal amount of the Fund is 1,506 per Unit. The Units of the Fund are subject to the Act on Book-Entry Transfer of Company Bonds, Shares, etc. (the Book-Entry Transfer Law ) and attribution of the Units is determined by listing or registering in the book-entry transfer account book with a book-entry institution provided in (11) Item on Book-Entry Institution below and a sub institution of such book-entry institution for account management (meaning the Account Management Institution provided in Article 2 of the Book-Entry Transfer Law and the Book-Entry Institution, etc. including the book-entry institution) (hereinafter the Units to be settled by listing or registering in the book-entry transfer account book shall be referred to as the Book-Entry Units ). Except for unavoidable circumstances, the management company will not issue unit certificates representing the relevant Book-Entry Units. The Book-Entry Units are not in blank or nominative form. With regard to the Fund, there are no credit ratings that are assigned by or provided for review by any registered credit rating agency at the request of the management company, or that will be assigned by or provided for review by any registered credit rating agency. (3) The Sum of Issuing (Selling) Amounts Up to 10 trillion yen (4) Issuing (Selling) Price To be the Net Asset Value per Unit of the Fund *1 as of the day on which a creation application is accepted An application for a creation shall be deemed to be accepted on the application date when such application is made before 3:00 pm and for which administrative procedures by the Authorised Participant* 2 involved in such application for a creation is completed. *1 Net Asset Value per Unit means the Net Asset Value divided by the number of Units as of the calculation date. In this Fund, the Net Asset Value per Unit is indicated on a per 100 Unit basis. *2 The Authorised Participant shall be the type I financial instruments business firm that is designated by the management company as a person to apply for the creation of the Units and the redemption. 16

18 Contact point for price inquiries of the Net Asset Value per Unit The Net Asset Value per unit of the Fund is available by inquiring at an Authorised Participant* or by calling the management company. BlackRock Japan Co., Ltd. Phone Number: (from 9:00 am to 5:00 pm on business days) Official company website: (5) Application Fee To be the amount that the relevant Authorised Participant decide at its sole discretion For further information, please contact the relevant Authorised Participant. Investors shall pay the application fee together with the amount equivalent to consumption taxes and regional consumption taxes imposed on it (the Amount equivalent to Consumption Taxes, etc. ) with regard to the application to the Authorised Participants. (6) Creation Unit One creation unit* or its integral multiples *A creation unit means a unit expressed in the number of the Units that the management company determines in order to create or redeem the Units. The details of (i) the shares comprising the Index (the Index ETF Constituent Stocks ) and (ii) cash that are necessary to create or redeem one creation unit shall be determined by the management company as the portfolio composition file (the PCF ) and shall be presented to the Authorised Participants. The number of the Units corresponding to one creation unit shall be determined by the management company on a daily basis. (7) Period for Application From November 10, 2016 to May 9, 2017 The period for application may be extended by filing the security registration statement before the expiry of the above period. (8) Place to Process Applications With regard to the place to process applications for the Fund, please inquire at the following contact point. 17

19 BlackRock Japan Co., Ltd. Phone Number: (from 9:00 am to 5:00 pm on business day) Official company website: (9) Date of Payment Continuous application period Applicants for the creation of the Units shall deliver the Index ETF Constituent Stocks and the cash* in respect of such creation application on or before the date designated by the Authorised Participants. Shares of each issue at the time of the creation shall be held in custody. *1 When an applicant for the creation of the Units is the issuer of a share included in the Index ETF Constituent Stocks or its subsidiary (meaning a subsidiary provided in Item 3 of Paragraph 1 of Article 2 of the Companies Act; the same applies hereafter, and the issuing company or its subsidiary shall be referred to as the Issuing Company, etc, ), in principle the applicant for the creation shall pay to the Authorised Participants the amount* separately designated by the management company as the amount equivalent to the market capitalisation of such shares in the Index ETF Constituent Stocks and the amount equivalent to expenses necessary to acquire such stocks in trust fund in money in lieu of such stocks. If the component stocks of the Index in respect of the application for creation include stocks (in this paragraph, the ex-dividend stocks ) with respect to which unit certificates are delivered in response to the application for creation on the day specified by a person who may receive dividends or subscribe for rights or on the business day immediately preceding such day after the ex-dividend or ex-rights of such component stocks, the management company may accept the application for creation in cash in the amount equal to the total market value of the specific issue of the ex-dividend stocks that are the component stocks of the Index in respect of the application for creation. The total market value of specific issues in this case will be the amount calculated by multiplying the closing price (or, if the closing price is not available, a similar price) at the financial instrument exchanges of the ex-dividend stocks as of the date of application for creation by the number of the ex-dividend stocks included in the component stocks of the Index in respect of the application for creation, and in this case, the management company may charge the amount separately designated by the management company as the amount equal to the expenses necessary for the trust property to acquire such ex-dividend stocks. *2 The amount separately designated as mentioned above shall be the amount obtained by multiplying the market capitalisation of such stocks by a percentage up to 0.2%. However, the percentage may be changed in the future. 18

20 (10) Place of Payment Please deliver the Index ETF Constituent Stocks and the money pertaining to your application to the Authorised Participants of the application. Some branches or offices of certain Authorised Participants may not process subscriptions. For further information, please inquire at the contact point provided in (8) Place to Process Applications. (11) Item on Book-Entry Institution The Book-Entry Institution regarding the Units of the Fund is as follows: Japan Securities Depository Center, Inc. (12) Others (A) Method of Application Investors who apply for the creation of Units shall make an application in accordance with the method prescribed by and within the business hours of the Authorised Participants. (B) Issuance outside Japan N/A (C) Non-Application Days The management company may not accept applications for the creation of the Units on the date or period mentioned in the following (i) to (viii). In this case, the management company does not present the PCF. (i) For a period of two business days, beginning two business days prior to the fund s account close dates (or, if the account close date falls on a holiday, for a period of three business days, beginning three business days prior to the account close date). (ii) In the event that the management company determines the Fund cannot be managed according to the Fund s investment policies provided in the Trust Deed due to unavoidable circumstances. (iii) For a period of three business days, beginning one business day prior to the exdividend or ex-rights day of any Index ETF Constituent Stocks. (iv) For a period of three business days, beginning one business day prior to the rebalance day for the Index ETF Constituent Stocks, or the day the number of stocks are changed. (v) For a period, beginning one business day prior to the delisting day (due to the share transfer and merger of any Index ETF Constituent Stocks) and ending one business day after the Index inclusion day for new shares (due to such transfer and merger). (vi) On any day on which trading of the Index ETF Constituent Stocks is suspended. 19

21 (vii) (viii) For a period of five business days prior to the date of trust termination, if the Fund terminates. Any event other than in (i) through (vii) above in which that the management company determines the Fund s operations may be undermined due to unavoidable circumstances. (D) Units in a Book-Entry Transfer Form Since the Units of the Fund were transferred to the book-entry transfer system of investment trust (sometimes referred to as the Book-Entry System ), the rights shall be subject to provisions of the Book-Entry Transfer Law and shall be treated in accordance with provisions of operational rules, etc. concerning the book-entry work of the book-entry institution mentioned in (11) Item on Book-Entry Institution above. Payment or delivery of dividends, redemption money and redemption stock shall be made in accordance with the Book-Entry Transfer Law and operational and other rules of the bookentry institution mentioned in above (11) Item on Book-Entry Institution. (Reference) Occurrence, determination and transfer of the Units of the Fund are managed by computer system. No unit certificates will be issued, because the creation, redemption and cancellation are made by listing or recording on book in the computer system (the Book-Entry Account Book ). 20

22 Part II. Fund Information Section 1. Status of the Fund 1. Characteristics of the Fund (1) Purpose and Basic Characteristics of the Fund (A) ishares Core TOPIX ETF (the Fund ) aims to achieve the Net Asset Value per unit of the Fund ( NAV ) that closely corresponds to the movement of the Tokyo Stock Exchange Stock Price Index (TOPIX) by investing mainly in shares of the component stocks of the Tokyo Stock Exchange Stock Price Index (TOPIX) (the Index or Benchmark ). It basically incorporates or is determined to incorporate shares of all constituents of the Index. The management company is entitled to add to the trust property up to a ceiling of 10 trillion yen ( 10,000,000,000,000) in securities and cash, and is entitled, subject to consent of the trustee company, to change the said ceiling. (B) Predominant feature of the Fund The Fund is an open-ended and subsequently offered equity investment trust provided under the concept that investment trust functions can be used to make the Index spot tradable. Its product design is different from other ordinary investment trusts from the following viewpoints: 4. Units of the Fund ( Units ) are listed on the Tokyo Stock Exchange. The Units of the Fund can be traded on the Tokyo Stock Exchange at any time. Units may be traded in blocks of 1 unit. Type I financial instruments business firms engaged in trading may determine their trading commissions using multipliers that they decide on their own. The method of trading is as a general rule the same as that of equity trading. For further information, please contact the relevant type I financial instruments business firm which is a member of the Tokyo Stock Exchange. 5. Additional creation and redemption are limited to those involving a certain minimum number of units. Additional creation and redemption are limited to those for an amount at least equal to the amount required to create a portfolio reflecting the Index so that the Fund s performance can closely correspond to the movement of the Index. Additional creation and redemption are done by a unit called a creation unit. The creation unit is a unit displayed by the number of Units that the management company determines to create and 21

23 redeem these rights. 6. The constituent stocks of the Index may be used for additional creation and redemption. The constituent stocks of the Index (the Index ETF Constituent Stocks ), as well as cash, which are necessary for the creation or redemption, are determined by the management company as a portfolio composition file (the PCF ), and presented to the Authorised Participants. If the market price on the stock exchange of a Fund s Unit deviates from its NAV, smooth price formulation on the stock exchange can be expected with reasonable arbitration that can shrink such deviation. 7. The Fund may carry out stock lending. In this case, the Fund will delegate all or part of the authority related to the instructions for stock lending to BlackRock Institutional Trust Company, N.A. [Product Classification] The product classification of the Fund based on the Guideline for Product Classification established by the Investment Trusts Association, Japan, is as follows: The product classification and attributes applicable to the Fund are shaded in the table. [Product Classification Table] Unit Type/ Open-end Type Unit-type investment trust Open-end investment trust Investment Area Domestic Foreign International Investment Assets (Source of Income) Equity Bond Real estate Other assets Asset mix Independent Category MMF MRF ETF Supplementary Classification Index type Special type [Attribute Category Table] Investment Assets Equity General Large-cap issue Small/medium-cap issue Bond General Public bond Frequency of Account Settlement Once a year Twice a year Four times a year Six times a year (every other month) Twelve times a year (every month) Daily Investment Area Global Japan North America Europe Asia Oceania Latin America Africa Target Index Nikkei 225 TOPIX Other 22

24 Corporate bond Other bond Credit attribute Real estate investment trust Other assets Asset mix Asset allocation fixed type Asset allocation variable type Other Middle & Near East (Middle East) Emerging [Definitions of Product Classification] Item Applicable Product Classification Description Unit Type or Openend Type Investment Country Investment Assets (source of income) Independent Classification Supplementary Classification Open-end investment trust Japanese Domestic Equity ETF Index Fund Means the fund where additionally established trust property is managed together with the initially established trust property Means the fund where main investment income derives effectively from domestic assets, as set forth in the Prospectus or the Trust Deed of the Investment Trust (the Trust Deed ) Means the fund where main investment income derives effectively from equities, as set forth in the Prospectus or the Trust Deed Means the securities investment trust specified in Article 12, items 1 and 2 of the Ordinance for Enforcement of the Act on Investment Trusts and Investment Corporations (Cabinet Order No. 480 of 2000) and the listed securities investment trust specified in Article of the Act on Special Measures Concerning Taxation (Act No. 26 of 1957) Means the type of fund where past performance linked to various indices will be sought, as set forth in the Prospectus or the Trust Deed 23

25 [Definitions of Attribute Classification] Item Applicable Attribute Classification Description Mean the assets which do not fall under Investment Assets Equity General the category of large-cap or small/middle-cap issues Means the fund where the financial Frequency of results are to be closed once annually, as Once annually Account Settlement set forth in the Prospectus or the Trust Deed Means the investment income derives Investment Country Japan from Japanese assets, as set forth in the Prospectus or the Trust Deed Index TOPIX Tokyo Stock Exchange Stock Price Index *For overall definitions of the product classification and attribute classification, please visit the website for the Investment Trusts Association, Japan ( (2) History of the Fund October 19, 2015 Trust deed concluded, fund established, investment started October 20, 2015 Listed on the First Section of the Tokyo Stock Exchange 24

26 (3) Structure of the Fund (A) Structure of the Fund Tokyo Stock Exchange listed Fund Management company ishares TOPIX ETF BlackRock Japan Co., Ltd. (Investment instructions, etc. for trust assets) Securities investment trust contract Trustee company Mizuho Trust & Banking Co., Ltd. (Trust assets administration service) Master trustee company: Trust & Custody Services Bank, Ltd. Agreement for delegation of authority related to instructions for lending of stocks in the trust assets Authorised Participant Agreement Investment adviser Authorised Participants BlackRock Institutional Trust Company, N.A. (Carry out stock lending upon delegation of authority related to instructions for management of the trust assets) (Dealings in subscription and distribution; services related to creation and redemption) Trading Investors 25

27 a. Securities investment trust deed In forming the Fund, this contract will be executed pursuant to the provisions of the Act on Investment Trusts and Investment Corporations (the Investment Trust Act ), and entered into by and between the management company and the trustee company in accordance with the trust deed registered in advance with the supervisory authorities. The principal provisions of the contract include basic investment policies, matters related to the services of the management company and trustee company, matters related to management of the principal of and income from the trust assets, and investment instructions. b. Authorised Participants contract This contract prescribes matters related to designation of authorised participants, creation of units, requests for redemption, brokerage service for Authorised Participants, brokerage commissions, etc. c. Delegation agreement for stock lending instructions in respect of the trust assets The delegation agreement stipulates the delegation of the authority to an agent for making stock lending instructions, as well as the details of the said lending operations, etc. (B) Overall condition of the management company The overall condition of the management company as of August 31, 2014, was as described below: a. Amount of capital 2,435 million b. Corporate history January 1985 March 1988 Merrill Lynch Investment Advisory Co., Ltd. (subsequently named Merrill Lynch Investment Managers Co., Ltd. ) established Mar Registered as a securities investment advisor Jun Obtained license for discretionary investment business Dec Obtained license for investment trust management business Barclays de Zoeta Wedd Co., Ltd. (subsequently named Barclays Global Investors Co., Ltd. ) established Jun Registered as a securities investment advisor Jan Obtained license for discretionary investment business 26