Trading and Redemption
iPath Exchange Traded Notes (ETNs) are listed on NYSE Arca (and in the case of certain iPath ETNs, on additional exchanges) and can be bought and sold at their market price on the secondary market, similar to other publicly traded securities. Interest is not paid during the term of the iPath ETNs and the currently available iPath ETNs do not make dividend distributions. Some iPath ETNs (including GEMS and MLP ETNs) are designed to pay monthly or quarterly coupons.
Trading or redemption options
Investors can liquidate iPath ETNs in one of three ways:
- Sell in the secondary market during trading hours. Investors transacting on the secondary market will not incur a redemption charge.
- Redeem a large block of securities, typically 25,000 to 50,000 securities directly to the issuer, Barclays Bank PLC, subject to the procedures described in the relevant prospectus¹. The redemption feature is intended to induce arbitrageurs to counteract any trading of the iPath ETNs at a premium or discount to their indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner. A one-time redemption charge will apply to certain ETNs. The charge is intended to allow the issuer to recoup brokerage and other costs incurred in connection with an early redemption (although the proceeds from the charge may be more or less than such costs).
- Hold until maturity and receive a cash payment on the maturity date from the issuer, Barclays Bank PLC, based on the performance of the corresponding index, less investor fees and other applicable costs. Please see the relevant prospectus for details on how the payment at maturity is calculated for your ETNs.
Indicative value calculation
iPath ETNs are debt securities, not mutual funds, so they do not have a net asset value or "NAV". An intraday "indicative value" meant to approximate the intrinsic economic value of each iPath ETN is calculated and published by Bloomberg or other third party. Additionally, the closing indicative value of each iPath ETN is calculated and published at the end of each calendar day on this website. View now.
Some iPath ETNs apply an index multiplier for purposes of calculating the closing indicative note value on each calendar day. The effect of the index multiplier is to adjust the rate at which the value of the ETN is expected to change (either directly or inversely) in response to changes in the level of the relevant index.
Most iPath ETNs are linked to the performance of the underlying index as measured by closing levels of the index constituents. For iPath® S&P MLP ETNs, the underlying index performance is measured by the consolidated volume-weighted average price (VWAP) level of the index constituents.
Indicative value and trading price
The intraday indicative value calculation is provided for reference purposes only. It is not intended as a price or quotation, or as an offer or solicitation for the purchase, sale, redemption, or termination of the iPath ETNs, nor does it reflect hedging or transaction costs, credit considerations, market liquidity, or bid-offer spreads. Published index levels from the index sponsors underlying the iPath ETNs may occasionally be subject to delay or postponement. Any such delays or postponements will affect the current index level and therefore the intraday indicative value of the applicable iPath ETNs. Index levels provided by the index sponsors underlying the iPath ETNs do not necessarily reflect the depth and liquidity of the underlying relevant market. For this reason and others, the actual trading price of the iPath ETNs may be different from their indicative value.
Certain iPath ETNs will be automatically redeemed if the indicative value reaches a certain level (an "automatic termination event"), as described in the relevant prospectus. Upon the occurrence of an automatic termination event, Barclays Bank PLC will deliver notice of automatic termination, and investors will receive a cash payment in U.S. dollars per ETN on the applicable valuation date calculated in accordance with the procedures described in the relevant prospectus.
If demand for any iPath ETN exceeds the initial amount of securities issued, subsequent issuances may be made under the registration statement. The terms of the new issue—including maturity date, investor fee, ticker and CUSIP—will be the same as the original issue, and it is expected that both issues would be immediately fungible.
Suspension of issuances
Depending on market factors or regulatory developments, iPath ETNs may be suspended from further sales from inventory and/or further issuances.² Daily redemptions at the option of the holders of iPath ETNs are typically not affected by suspensions, nor are Barclays Bank PLC's lending activities from existing inventory with respect to iPath ETNs typically affected by suspensions.
It is possible that a suspension, as described above, may influence the market value of iPath ETNs. Limitations on issuance and sale implemented may cause an imbalance of supply and demand in the secondary market for iPath ETNs, which may cause them to trade at a premium or discount in relation to their indicative value. Therefore, any purchase of iPath ETNs in the secondary market may be at a purchase price significantly different from their indicative value.
¹ The issuer may from time to time in its sole discretion reduce, in part or in whole, the minimum redemption amount. Any such reduction will be applied on a consistent basis for all holders of units at the time the reduction becomes effective.
² As will be described in further detail in the applicable pricing supplement relating to the iPath ETNs.
Selected Risk Considerations
An investment in the iPath ETNs described herein (the ETNs) involves risks. Selected risks are summarized here, but we urge you to read the more detailed explanation of risks described under Risk Factors in the applicable prospectus supplement and pricing supplement.
You May Lose Some or All of Your Principal: The ETNs are exposed to any change in the level of the underlying index, or the Volume Weighted Average Price ("VWAP") level, in the case of the iPath® S&P MLP ETN, between the inception date and the applicable valuation date. Additionally, if the level of the underlying index, or the VWAP level in the case of the iPath® S&P MLP ETN, is insufficient to offset the negative effect of the investor fee and other applicable costs, you will lose some or all of your investment at maturity or upon redemption, even if the value of such index, or the VWAP value in the case of the iPath® S&P MLP ETN, has increased or decreased, as the case may be. Because the ETNs are subject to an investor fee and any other applicable costs, the return on the ETNs will always be lower than the total return on a direct investment in the index components. The ETNs are riskier than ordinary unsecured debt securities and have no principal protection.
Credit of Barclays Bank PLC: The ETNs are unsecured debt obligations of the issuer, Barclays Bank PLC, and are not, either directly or indirectly, an obligation of or guaranteed by any third party. Any payment to be made on the ETNs, including any payment at maturity or upon redemption, depends on the ability of Barclays Bank PLC to satisfy its obligations as they come due. As a result, the actual and perceived creditworthiness of Barclays Bank PLC will affect the market value, if any, of the ETNs prior to maturity or redemption. In addition, in the event Barclays Bank PLC were to default on its obligations, you may not receive any amounts owed to you under the terms of the ETNs.
A Trading Market for the ETNs May Not Develop: Although the ETNs are listed on NYSE Arca, a trading market for the ETNs may not develop and the liquidity of the ETNs may be limited, as we are not required to maintain any listing of the ETNs.
No Interest Payments from the ETNs: You may not receive any interest payments on the ETNs.
Restrictions on the Minimum Number of ETNs and Date Restrictions for Redemptions: You must redeem at least 25,000 or 50,000 (depending on the series) ETNs of the same series at one time in order to exercise your right to redeem your ETNs on any redemption date. You may only redeem your ETNs on a redemption date if we receive a notice of redemption from you by certain dates and times as set forth in the pricing supplement.
Uncertain Tax Treatment: Significant aspects of the tax treatment of the ETNs are uncertain. You should consult your own tax advisor about your own tax situation.