Archived CBOE, CBSX, & CFE Press Releases

FOR IMMEDIATE RELEASE

CBOE Announces Launch of EFA Options Based on iShares MSCI EAFE Exchange Traded Fund

CHICAGO, September 23, 2002 - The Chicago Board Options Exchange (CBOE), the world's largest options exchange, today announced that on September 25, 2002, it will list options on iShares MSCI EAFE Exchange Traded Fund (ticker symbol EFA). The MSCI EAFE Index, created in 1969, is widely recognized as the preeminent benchmark in the United States to measure international stock market performance(1). It comprises 21 MSCI country indices, representing the developed markets outside of North America: Europe, Australasia and the Far East. The iShares MSCI EAFE Exchange Traded Fund is one of the fastest growing exchange traded funds (ETF) since its introduction in August 2001 by Barclays Global Investors (BGI), and has by far the most assets under management of any internationally-focused ETF.

"It is only fitting that the premier benchmark for international equities trade at CBOE, the world's largest index options marketplace," said CBOE Chairman and CEO William J. Brodsky. "We are especially pleased to team up with MSCI and BGI, to offer investors the tool they need to effectively manage international portfolios and enhance yields on those investments. EFA options will bring the world closer to home."

Henry Fernandez, President and CEO of MSCI, said, "We are delighted to have licensed our MSCI EAFE Index to the CBOE in connection with the listing of options on the iShares MSCI EAFE Exchange Traded Fund. Since its launch by BGI, the iShares MSCI EAFE Exchange Traded Fund has been an outstanding success. The options offer another investment tool for US equity investors who overwhelmingly use the MSCI EAFE Index as their international equity benchmark."

Steven Schoenfeld, Head of International Product Strategy at BGI, said, "We are confident that CBOE EFA Options will further solidify iShares MSCI EAFE's position as the dominant international equity ETF, and advance its role as a capital market instrument. The combination of the EFA Exchange Traded Fund and EFA Options will provide investors with unparalleled flexibility to precisely manage their international equity exposure."

EFA Options are American-style exercise and physical delivery. The underlying security is 100 shares of the iShares MSCI EAFE Exchange Traded Fund. The iShares MSCI EAFE Exchange Traded Fund seeks investment results which correspond, generally, to the price and performance, before fees and expenses, of the MSCI EAFE Index.

Susquehanna Investment Group has been appointed the Designated Primary Market Maker (DPM) in the options.

MSCI is a leading provider of global indices and benchmark related products and services to investors worldwide. Morgan Stanley, a global financial services firm and a market leader in securities, asset management, and credit services, is the majority shareholder of MSCI, and The Capital Group Companies, Inc., a global investment management group, is the minority shareholder.

CBOE, the world's largest options marketplace and creator of listed options, is regulated by the Securities and Exchange Commission (SEC). For additional information about the CBOE and its products, please visit CBOE's web site at http://www.cboe.com.


EFA OPTIONS OPTIONS ON THE iSHARES MSCI EAFE EXCHANGE TRADED FUND

Symbol: EFA

Underlying: The underlying for EFA Options is 100 shares of the iShares MSCI EAFE Exchange Traded Fund, an exchange-traded fund designed to track the performance of the MSCI EAFE Index (Europe, Australasia, Far East). The MSCI EAFE Index is a capitalization-weighted index composed of stocks representing market characteristics of 21 countries in Europe, Australasia and the Far East. The MSCI EAFE Index is recognized as the preeminent benchmark in the United States to measure international equity performance.

Strike Price Intervals: Strike prices are listed with minimum intervals of 1 point.

Strike (Exercise) Prices: In-, at- and out-of-the-money strike prices are initially listed. New strikes can be added as the index moves up or down.

Premium Quotation: Stated in decimals. One point equals $100. Minimum tick for options trading below 3.00 is 0.05 ($5.00) and for all other series, 0.10 ($10.00).

Expiration Date: Saturday following the third Friday of the expiration month.

Expiration Months: Up to three near-term months plus up to three months on the March quarterly cycle. LEAPS may also be available for trading.

Exercise Style: American - EFA Options generally may be exercised on any business day before the expiration date.

Settlement of Option Exercise: Physical Delivery. Exercise notices properly tendered on any business day will result in delivery of the iShares MSCI EAFE Exchange Traded Fund on the third business day following exercise.

Position Limit: 22,500 contracts on the same side of the market.

Margin: Uncovered writers must deposit 100% of the option proceeds plus 15% of the aggregate contract value (current index level multiplied by $100) minus the amount by which the option is out-of-the-money, if any. Minimum margin is 100% of the option proceeds plus 10% of the aggregate contract value. Long puts or calls must be paid for in full.

CUSIP Number: 46428765

Last Trading Day: Trading in EFA Options will ordinarily cease at the close on the business day (usually a Friday) preceding the expiration date.

Trading Hours: 8:30 a.m. to 3:15 p.m. Central Time (Chicago time).


For information on the MSCI EAFE Index, please contact:
Dorsey Horowitz with MSCI, New York 212-762-5790
Steve Bruce and Ed Rowley with
Abernathy MacGregor, New York 212-371-5999

For information on the iShares MSCI EAFE Exchange Traded Fund, please contact:
Christine Hudacko 415-597-2687

For information on the EFA Options, please contact:
Lynne Howard-Reed 312-786-7123
Or visit the EFA Options website found at: http://www.cboe.com/efa


CBOE, Chicago Board Options Exchange and LEAPS are registered trademarks of Chicago Board Options Exchange, Incorporated.

MSCI, EAFE, iShares, BGI and the MSCI index names are service marks of Morgan Stanley Capital International Inc. ("MSCI"), its licensors or their affiliates (the "MSCI Parties") and have been licensed for use by the Chicago Board Options Exchange. Option contracts on any exchange-traded fund based on an MSCI index are not sponsored, guaranteed or endorsed by MSCI, the issuer of such fund or their affiliates. None of the MSCI Parties makes any representations regarding the advisability of investing in such option contracts. None of the MSCI Parties makes any warranty, express or implied, or bears any liability as to the results to be obtained by any person or any entity from any option contract. No purchaser, seller or holder of this security, or any other person or entity, should use or refer to any trade name, trademark or service mark relating thereto to sponsor, endorse, market or promote any other security without first contacting MSCI to determine whether MSCI's permission is required.

Barclays Global Investors is one of the world's largest asset managers, and the world's largest provider of structured investment strategies such as indexing, tactical asset allocation, and quantitative active strategies. BGI managed more than $761 billion in assets as of 6/30/02, and over 2,000 funds, which track over 250 global indexes, for nearly 2,000 clients in 41 countries around the world. As the creator of the first index strategy over 30 years ago, BGI is an innovator in investment management, applying science and technology to the investment process. BGI has over 2,000 employees worldwide and is owned by Barclays PLC, one of the UK's largest companies, and one of the world's leading global financial services providers, with operations in over 60 countries worldwide.

(1) Pensions and Investment Magazine Survey, July 2000

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