AN iSHARES ETF UPDATE ON THE RUSSIA-UKRAINE CRISIS

BlackRock notified shareholders on 20 May 2022 that the following iShares UCITS ETFs with Russian exposures would be terminated.

• iShares MSCI Eastern Europe Capped UCITS ETF | IEER
• iShares MSCI Russia ADR/GDR UCITS ETF | CSRU

Both of these funds had already been suspended from trading in early March 2022. A further notification was made by the Boards of Directors on 16 June 2022 informing investors about the termination of the fund with 20 June 2022 as the "Termination Start Date".

Due to Russia’s invasion of Ukraine, normal market trading conditions have remained materially impaired and a significant portion of Russian securities are not tradeable for investors outside Russia. Additionally, all major index providers have removed Russian securities from their indexes. As a result, IEER and CSRU have been put into termination in the interests of shareholders. 

No; there are no elections or actions required of shareholders. BlackRock will endeavour to dispose of the funds’ remaining assets and return the proceeds (if any) to shareholders that were on the register (maintained by each fund’s registrar) when the closure was announced without any additional information or action required from or by investors.

As disclosed in the prospectuses of the funds, BlackRock may, in good faith and based on available information, determine an asset’s fair value using a variety of methodologies. This process is carried out according to formal pricing policies.

Given the continued market closure for non-local investors and current illiquidity of Russian securities held by non-local investors, BlackRock Pricing Committees are applying fair valuation approaches for those securities. It is important to note, however, that given the nature of those investments, determinations as to their fair value may not represent the actual amount that will be realised upon their eventual disposal.

Shares in CSRU and/or IEER on 20 June 2022 (the Termination Start Date) entitled owners to a pro rata share of cash and readily realisable (that is, non-Russian) assets held by either fund, net of expenses and estimated anticipated transaction-related expenses (including any duties and charges and costs of conversion of the depositary receipts). These proceeds were distributed to shareholders on 27 June 2022.

Conditions in August 2023 allowed the sale of a limited number of securities held by iShares MSCI Russia ADR/GDR UCITS ETF.  Proceeds from these disposals were distributed to investors who held fund shares on 20 June 2022 (the Termination Start Date). 

The remaining Russian securities in these funds will be liquidated at some point in the future, should this become possible, practicable and appropriate, in order to return any residual net proceeds to investors.

Given that the return of liquidation proceeds to shareholders may take place over a prolonged period, shares will be retained on the shareholder register of the two funds until later in the termination process. This should be helpful to investors in evidencing their entitlement to potential future payments (if there are any) and may help intermediaries maintain their records of the beneficial owners of the shares of the funds for longer.

Shareholders were informed of the closure of the funds on 20 May 2022 and the funds have been in termination since 20 June 2022. The product pages on ishares.com have consequently been removed as the funds are no longer tradeable.

For IEER, net realisable proceeds from the non-Russian holdings have already been returned to investors; the Russian securities will remain in the fund until such time as it is possible, practicable and appropriate (in the investment manager’s view) to liquidate each position.

For CSRU, net realisable proceeds were also returned to investors in June 2022. Conditions have since allowed the sale of a limited number of further securities held by the fund.  Proceeds from these disposals have been distributed to investors who held fund shares on 20 June 2022 (the Termination Start Date). The remaining Russian securities will continue to be held by the fund until such time as it is possible, practicable and appropriate (in the investment manager’s view) to liquidate each position.

The funds are in the process of termination and shares in them can no longer be traded or redeemed.

Shareholders have been informed that it may take a substantial amount of time before they receive proceeds (if any) from the disposal of Russian securities.

Restrictions on trading of Russian securities by non-local investors as well as global sanctions on Russian entities will delay liquidation of that portion of IEER’s and CSRU’s holdings.

Due to political and market uncertainties and the fact that it is not possible to predict the optimal time for selling the Russian securities or whether certain securities can be sold at all, there is no guarantee that optimal value, or any value at all, can be achieved from the Russian securities. An assessment will be made based on information available to the investment manager at the relevant time.

Shareholders will be sent their share of net proceeds (if there are any) from the sale of any remaining assets, as and when such assets can be sold.

BlackRock has discretion in facilitating the disposal of the Russian securities, which will be assessed based on multiple factors including, but not limited to, legal restrictions, liquidity, spreads, international investor access, volume and volatility.

We do not calculate or publish official daily NAVs for these two ETFs since the funds are in termination. The NAVs as of the last day of trading can be downloaded below.

Investment vehicles in jurisdictions classified by Russia as “unfriendly”, e, g. Irish domiciled funds, will have any dividends paid into restricted RUB (Type S) cash accounts. Currently, these accounts are not accessible to non-local investors.

Shareholders should not expect to receive dividends from this fund as the fund is in termination.

Please see below.