Description of Securities Registered under Section 12 of the Securities Exchange Act of 1934
Description of the Securities Registered
Under Section 12 of the Securities Exchange Act of 1934
The following is a summary of the rights of the shares (the “Shares”) of iShares Silver Trust (the “Trust”), which is the only class of securities of the Trust that is registered under Section 12 of the Securities Exchange Act of 1934.
Each Share represents a fractional undivided beneficial interest in the net assets of the Trust. The Shares do not represent a traditional investment and are not similar to shares of a corporation operating a business enterprise with management and a board of directors. All Shares are of the same class with equal rights and privileges. All Shares are transferable, fully paid and non-assessable. Each Share entitles the holder (the “Shareholder”) to vote on the limited matters upon which Shareholders may vote under the Trust Agreement, as described under “Voting Rights” below. The Shares do not entitle their holders to any conversion or pre-emptive rights or any redemption rights.
Cash and Other Distributions
If iShares Delaware Trust Sponsor LLC (the “Sponsor”) and The Bank of New York Mellon (the “Trustee”) determine that there is more cash being held in the Trust than is needed to pay the Trust’s expenses for the next month, the Trustee will distribute the extra cash to the Depository Trust Company (“DTC”), which holds the Shares for their respective holders. If the Trust receives any property other than silver or cash, the Trustee will distribute that property to DTC by any means it thinks is lawful, equitable and feasible. If it cannot make the distribution in that way, the Trustee will sell the property and distribute the net proceeds in the same way as it does with cash. Registered holders of Shares are entitled to receive these distributions in proportion to the number of Shares owned. Before making a distribution, the Trustee may deduct any applicable withholding taxes and any fees and expenses of the Trust that have not been paid. The Trustee distributes only whole U.S. dollars and cents and is not required to round fractional cents to the nearest whole cent. The Trustee is not responsible if it decides that it is unlawful or impractical to make a distribution available to registered holders.
Owners of Shares do not generally have any voting rights. However, registered holders of at least 25% of the Shares have the right to require the Trustee to cure any material breach by it of the Second Amended and Restated Depositary Trust Agreement (as amended from time to time, the “Trust Agreement”), and registered holders of at least 75% of the Shares have the right to require the Trustee to terminate the Trust Agreement as described therein.
The Securities Depository; Book-Entry-Only System; Global Security
Individual certificates are not issued for the Shares. Instead, a global certificate is signed by the Trustee on behalf of the Trust, registered in the name of Cede & Co., as nominee for DTC, and deposited with the Trustee on behalf of DTC. The global certificate represents all of the Shares outstanding at any time. Beneficial ownership of the Shares is limited to DTC Participants, Indirect Participants and persons holding interests through DTC Participants and Indirect Participants (each as defined in the Trust Agreement). Owners of beneficial interests in the Shares will be shown on, and the transfer of ownership is effected only through, records maintained by DTC, with respect to DTC Participants; the records of DTC Participants, with respect to Indirect Participants; and the records of Indirect Participants, with respect to beneficial owners that are not DTC Participants or Indirect Participants. Beneficial owners are expected to receive from or through a DTC Participant a written confirmation relating to their purchase of the Shares. Investors may transfer Shares through DTC by instructing the DTC Participant or Indirect Participant through which they hold their Shares to transfer the Shares. Transfers will be made in accordance with standard securities industry practice.
The rights of the Shareholders generally must be exercised by DTC Participants acting on their behalf in accordance with the rules and procedures of DTC.