Free Writing Prospectus

Filed Pursuant to Rule 433

Registration No. 333-169119

February 16, 2012

THE BASICS OF iPATH® LEVERAGED EXCHANGE TRADED NOTES Leveraged investing has gained increasing popularity in recent years. The Barclays Bank PLC iPath® Leveraged Exchange Traded Notes (the “iPath ETNs”) seek to provide investors with an exchange-traded way to access leveraged returns based on the performance or inverse performance of market benchmarks or strategies. The iPath ETNs offer both “long” and “short” leveraged exposure to a range of equity index provider indices, including indices sponsored by S&P, Russell and MSCI, as listed in Figure 1 on the next page.

2 iPath FIGURE 1 iPath Leveraged ETNs: Available Exposures Index Exposure available through iPath ETNs1 Russell 1000® TR Index Long Extended Short Extended Russell 2000® TR Index Long Extended Short Extended S&P 500® TR Index Long Extended Short Extended MSCI EAFE® Index Long Enhanced Short Enhanced MSCI Emerging Markets Index Long Enhanced Short Enhanced S&P 500 VIX Mid-Term Futures™ Index TR Long Enhanced The iPath ETNs seek to provide investors with an alternative maintain the initial multiple (incurring additional costs and form of leveraged investment to leveraged exchange traded taxes). Instead, each series of iPath ETNs is designed to funds (“ETFs”), which typically track a daily or monthly multiple target a return of a multiple (established at inception) of of an index’s return through a “reset” feature (see Figure 2). the performance of an underlying index over the term of the As a result of this daily or monthly “reset” feature, a leveraged iPath ETNs and without a daily or monthly reset. Since there ETF is subject to the “path dependency” of its underlying is no daily or monthly “reset” of the applicable multiple of the index, meaning that the movement of its underlying index underlying Index’s return over the term of the iPath ETNs, from day to day or month to month directly impacts the the path dependency of the iPath ETNs to their respective performance of the fund in subsequent periods as managers indices is mitigated. rebalance the ETF portfolio daily or monthly, as applicable, to 1. For each series of ETNs, “enhanced” refers to an initial leverage factor of 2 on the date of the ETN’s issuance and “extended” refers to an initial leverage factor of 3 on the date of the ETN’s issuance. A “long” ETN is linked to a leveraged participation in the performance of the underlying index, whereas a “short” ETN is linked to a leveraged participation in the inverse performance of the underlying index. Because the leveraged exposure to the underlying index does not reset, investors who invest at a time other than inception of the each respective ETN will invest at a different “participation”—or value of the notional exposure per ETN to the performance of the underlying index relative to the value of each ETN—and therefore may have a different leverage ratio than the initial leverage factor. For more information on the participation, see the section entitled “Participation” in the applicable prospectus and “Uses of Participation” below.

The Basics of iPath® Leveraged Exchange Traded Notes 3 FIGURE 2 iPath Leveraged ETNs vs. Leveraged ETFs iPath Leveraged ETNs Leveraged ETFs Leveraged Performance Yes Yes Liquidity Daily on Exchange Daily on Exchange Registration Securities Act of 1933 Investment Company Act of 1940 Form Medium-Term Note 40 Act Fund / UIT Principal risk Market and issuer risk Market risk Recourse Issuer credit Portfolio of Securities Performance Target Payment at Maturity Daily or Monthly Performance Target Maturity Fixed Maturity* No Path Dependency** No Yes Institutional size redemption Daily to the issuer*** Daily via custodian Formulaic Optional Redemption Value Yes*** No Automatic Termination Event Yes No * Subject to the occurrence of an automatic termination event or early redemption by the investor. ** An index-linked security shows “path dependency” if its value on any given day cannot be derived from the current and initial values of its underlying index but instead is dependent on the historical “path” that the index has taken over the calculation period. *** Subject to the occurrence of an automatic termination event. The mechanics of the iPath Long ETNs and the iPath Short financing the position (Long), or a notional investment ETNs are explored in further detail below. In essence, both in cash collateral that includes the proceeds of the sale ETN structures seek to deliver the returns of a leveraged of notionally borrowed equity securities underlying the position consisting of an investment in the equity securities applicable underlying index (Short), in each case less underlying the applicable index plus a notional loan partly applicable fees, financing charges and costs.

4 iPath iPath Long ETN Mechanics n To prevent the value of the iPath Long ETNs from A margin account provides an example that conceptually declining below a certain level, the iPath Long ETNs demonstrates how the mechanics of a long, leveraged provide that Barclays Bank PLC will automatically redeem investment are correspondingly reflected in the mechanics a series of iPath Long ETNs in whole, but not in part, if the of the iPath Long ETNs. indicative intraday note value of that series falls below the Generally speaking, to implement a leveraged long strategy automatic termination level, as defined in the applicable in a margin account, an investor borrows additional cash prospectus, on any calendar day on or prior to the final valuation date.2 For tax implications of purchasing on “margin” to invest along with his or her own capital and thus increase the size of the equity position beyond what replacement securities offering similar exposure, including can be established with the cash currently available within the potential application of the wash sale rules, please his or her account. consult a tax professional. n An investor in a margin account may receive a “margin By analogy, the investor’s own capital at the point the call” to deposit more cash or securities into his or her position is established is conceptually represented by the margin account if the value of the relevant investment iPath Long ETN’s closing indicative note value; the cash decreases below a specified level. The iPath Long ETNs that the investor borrows “on margin” is conceptually do not require an investor to invest more if the value of represented by the then-current financing level; and the the iPath Long ETNs decreases. aggregate equity position is conceptually represented by 3 the long index amount. The following are certain key terms of the iPath Long ETNs: n The Long Index Amount: The notional long position in the An investor in a margin account would be expected to pay applicable index underlying each series of iPath Long interest on the borrowed amount, which is represented in ETNs, published on each valuation date. the iPath Long ETN by the daily financing charge, which, Long Index Principal Amount Index along with the daily investor fee, is reflected on a cumulative Amount = x Initial Factor Leverage X Performance Factor basis in the financing level. *Notethat theprincipal amount, initialleverage factor and Despite the conceptual similarity, there are several differences underlyingindex will vary with each series of the iPath LongETNs. between implementing a leveraged long strategy in a margin n The Financing Level: The notional loan provided to account and investing in iPath Long ETNs. Differences include finance the long position in the underlying index (a daily (but are not limited to) the following: financing charge and a daily investor fee will accrue in n iPath Long ETNs are subject to the credit risk of Barclays favor of the Issuer on the financing level), published on Bank PLC. each valuation date. n The maximum loss of investing directly in iPath Long n The Closing Indicative Note Value (“CINV”): The difference ETNs is limited to the amount invested. between the long index amount and the financing level, n iPath Long ETNs charge a daily investor fee and a daily published on each valuation date. financing charge as described in the applicable prospectus, whereas a margin account would be expected to pay Graphically, Figure 3 demonstrates the relationship between interest but not an additional investor fee. the terms outlined above. 2. The value at which that series would be redeemed is determined by Barclays Bank PLC, acting as calculation agent, in accordance with the procedures described in the relevant prospectus. 3. Key terms are outlined in the relevant prospectus in more detail.

The Basics of iPath® Leveraged Exchange Traded Notes 5 FIGURE 3 iPath Short ETN Mechanics iPath Long ETN Mechanics As with the iPath Long ETNs, the mechanics of a short leveraged investment through a margin account can be compared to the mechanics of the iPath Short ETNs. In this Financing Level case, an investor with cash in a margin account acting as $100 Long collateral for a position borrows shares “on margin” and sells Amount Index those shares “short” for cash at market prices. If the prices $200 of the shares decline, the investor can use part of the total CINV $100 cash available in the margin account to repurchase those shares at a lower price, return the borrowed stock and keep the difference as profit. Conversely, if the prices of the For illustrative purposes only. shares increase, the investor will use a portion of his or her collateral, as well as the initial cash proceeds from the sale, to repurchase the shares on the market and return the Hypothetical Example: borrowed stock. In this hypothetical example, assuming an iPath Long ETN linked to the S&P 500® Total Return Index was issued and By analogy, the shares borrowed “on margin” at the point listed on October 20, 2003, with an initial index closing level the position is established are conceptually represented by of 1,518.97 and: the iPath Short ETN’s short index amount. The cash n A principal amount per ETN of $100; collateral deposited by the investor in the margin account n A financing level of $100 on the initial valuation date; plus proceeds from short sales are conceptually represented n A long index amount of $200 on the initial valuation by the T-Bill amount. The remaining portion of cash that date; and would be available after the repurchase of borrowed equities n An initial leverage factor of 2. is represented by the closing indicative note value of the iPath ETN. At the end of the trading day on January 20, 2006, the closing level of the Index was 1,909.35 and the financing An investor in a margin account would be expected to pay level of $100 had accrued $6.96 in daily financing charges a fee to borrow shares (typically referred to as a “prime” or and daily investor fees. The hypothetical CINV for the ETN “hypothecation” rate) based on the value of the borrowed on such trading day would equal $144.44, as per the amount. In the mechanics of the iPath Short ETNs, a daily following calculations: index borrow cost is deducted from the T-Bill amount, Long Index Amount = $200 x (1,909.35/1,518.97) = $251.40 based on the value of the short index amount. Financing Level = $100 + $6.96 = $106.96 Despite the conceptual similarity, there are several CINV = $251.40 – $106.96 (Long Index Amount – Financing differences between implementing a short strategy in a Level) = $144.44 margin account and investing in iPath Short ETNs. Thisinformation is for illustrative purposes onlyand isnot indicative Differences include (but are not limited to) the following: of future results or performance. n iPath Short ETNs are subject to the credit risk of Barclays Bank PLC.

6 iPath n The maximum loss of investing directly in iPath Short n The T-Bill Amount: The notional value of cash amounts ETNs is limited to the amount invested. underlying each note (daily interest will accrue in favor of n iPath ETNs charge a daily investor fee and a daily index the investor and a daily investor fee and a daily index borrow cost as described in the applicable prospectus. borrow cost will accrue in favor of the Issuer on the T-Bill n To prevent the value of the iPath Short ETNs from declining amount), published on each valuation date. below a certain level as the level of the underlying index n The Closing Indicative Note Value (CINV): The difference increases, the iPath Short ETNs provide that Barclays Bank between the T-Bill amount and the short index amount, PLC will automatically redeem a series of iPath Short ETNs published on each valuation date. in whole, but not in part, if the indicative intraday note value of that series falls below the automatic termination Graphically, Figure 4 demonstrates the relationship between level, as defined in the applicable prospectus, on any the terms outlined above. calendar day on or prior to the final valuation date.4 For tax implications of purchasing replacement securities offering FIGURE 4 similar exposure, including the potential application of the iPath Short ETN Mechanics wash sale rules, please consult a tax professional. n An investor in a margin account may receive a “margin call” to deposit more cash or securities into his or her margin account if the value of the borrowed shares CINV $100 increases above a specified level. The iPath Long ETNs Amount T-Bill do not require an investor to invest more if the value of $200 Short the iPath Long ETNs decreases. Index Amount $100 The following are certain key terms5 of the iPath Short ETNs: n The Short Index Amount: The notional short position in For illustrative purposes only. the equity securities underlying the applicable index underlying each series of iPath Short ETNs, published on each valuation date. Index Short Principal x Initial Leverage Amount Performance Index Amount = Factor X Factor *Note that the principal amount, initial leverage factor and underlying indexwill vary with each series of the iPath Short ETNs. 4. The value at which that series would be redeemed is determined by Barclays Bank PLC, acting as calculation agent, in accordance with the procedures described in the relevant prospectus. 5. Key terms are outlined in the relevant prospectus in more detail.

The Basics of iPath® Leveraged Exchange Traded Notes 7 Hypothetical Example: ETNs do not deliver a fixed daily multiple of index In this hypothetical example, assume an iPath Short ETN percentage performance. Participation is intended to linked to the S&P 500® Total Return Index was issued and approximate the ratio of (1) the value of the notional listed on January 1, 1999, with an initial index closing level of exposure per ETN to the performance of the applicable 1,670.01 and: underlying index relative to (2) the value of each ETN, n A principal amount per ETN of $50; and it provides investors with an indication of leverage at n A short index amount of $150 on the initial valuation date; any given point. Investors who invest at a different time n A T-Bill Amount of $200 on the initial valuation date; and will invest at a different participation and therefore each n An initial leverage factor of 3. investor will have a different leverage ratio. At the end of the trading day on July 1, 2000, the closing level of the index was 2,012.83 and the T-Bill amount had The participation for each iPath ETN is calculated using a accrued $14.70 in daily interest, net of the compounded formula set forth in the applicable prospectus and can be deduction of daily investor fees and daily index borrow used as a general approximation of the change in the CINV costs. The hypothetical CINV for the note on such trading of each ETN for a given percentage change in the level of day would equal $33.91, as per the following calculations: the underlying index: Short Index Amount = $150.00 x (2,012.83/1,670.01) = Figure 5.1 provides a hypothetical example of the performance $180.79 of an iPath Long ETN over a two-week period, with an initial participation on the date of purchase equal to 2.00 and T-Bill Amount = $200 + $14.70 = $214.70 where the index increases by 25% during the first week CINV = $214.70 – $180.79 = $33.91 before decreasing by 20% in the second week. In each case, Thisinformation is for illustrative purposes onlyand isnot indicative the table provides hypothetical values for the CINV, Long of future results or performance. Index Amount, Financing Level and Participation as they would have been calculated as of the close of the week, Participation where the accrual of the daily financing charge and the daily Participation is an integral concept for investors to investor fee over the course of the relevant week is understand when considering an investment in iPath ETNs. represented in aggregate by the “Financing Charges” and As discussed earlier, unlike some leveraged and inverse “Investor Fee,” respectively. leveraged ETFs, the iPath ETNs do not reset their exposures in order to track a fixed multiple of the daily or monthly Daily Investor Fee 0.80% performance (or inverse performance) of the applicable Daily Financing Charge 1.00% underlying index. Since the exposure is not reset, the iPath

8 iPath FIGURE 5.1 As at Index Level Long Index Amount Financing Level CINV (Long Index Participation (Long Purchase Date 1,864 $200.00 $100.00 Amount – Financing Index Amount / Level) CINV) $100.00 2.00 Accrued During Investor Fee Financing Charges Week 1 $0.015 $0.019 End of Week 1 Index Level Long Index Amount Financing Level CINV (Long Index Participation (Long 2,330 $250.00 $100.035 Amount – Financing Index Amount / (index increased Level) CINV) 25.00% since $149.965 1.67 Purchase Date) % Change in CINV since Purchase Date (Participation at Purchase Date) x (% change in Index Level since 49.73% Purchase Date) 50.00%* Accrued During Investor Fee Financing Charges Week 2 $0.023 $0.019 End of Week 2 Index Level Long Index Amount Financing Level CINV (Long Index Participation (Long 1,864 $200.00 $100.07 Amount – Financing Index Amount / (index decreased Level) CINV) 20.00% since End of $99.923 2.002 Week 1) % Change in CINV since End of Week 1 (Participation at End of Week 1) x (% change in Index Level since –33.37% End of Week 1) –33.34%* * Doesnot take into account the effect of the daily financing charge and daily investor fee. Thisinformation is for illustrative purposes only and is not indicative of future results or performance. In Figure 5.1, the percentage change in the CINV of the ETN Figure 5.2 provides a hypothetical example of the perfor-over the course of each week is presented in comparison mance of an iPath Short ETN linked to the same index as in with the percentage change achieved by multiplying the Figure 5.1 over the same 2 week period. In each case, the weekly index performance by the applicable participation table provides hypothetical values for the CINV, Short Index at the end of the previous week, which does not include Amount, T-Bill Amount and Participation calculated as of the effect of the daily financing charge and daily investor the close of the week, where the accrual of the daily interest, fee. At the end of Week 2, the index level was the same as the daily investor fee and the daily index borrow cost over the on the date of purchase, but ETN performance was slightly course of the relevant week is represented in aggregate by negative due to the negative effect of the daily investor the “Interest,” “Investor Fee” and “Borrow Cost,” respectively. fees and the daily financing charge. Fee Rate 0.80% T-Bill Rate 1.00% Borrow Rate 1.75%

The Basics of iPath® Leveraged Exchange Traded Notes 9 FIGURE 5.2 As at Index Level Short Index Amount T-Bill Amount CINV (T-Bill Amount Participation (Short Purchase Date 1,864 $200.00 $300.00 – Short Index Index Amount / Amount) CINV $100.00 2.00 Accrued During Interest Investor Fee Borrow Cost Week 1 $0.058 $0.015 $0.067 End of Week 1 Index Level Short Index Amount T-Bill Amount CINV (T-Bill Amount Participation (Short 2,330 $250.00 $299.975 – Short Index Index Amount / (index increased Amount) CINV) 25.00% since $49.975 5.003 Purchase Date) % Change in CINV since Purchase Date (Participation at Purchase Date) x (% change in Index Level since –50.03% Purchase Date) x –1 –50.00%* Accrued During Interest Investor Fee Borrow Cost Week 2 $0.058 $0.010 $0.084 End of Week 2 Index Level Short Index Amount T-Bill Amount CINV (T-Bill Amount Participation (Short 1,864 $200.00 $299.939 – Short Index Index Amount / (index decreased Amount) CINV) 20.00% since End of $99.939 2.001 Week 1) % Change in CINV since End of Week 1 (Participation at End of Week 1) x (% change in Index Level since 99.98% End of Week 1) x –1 –100.05%* * Doesnot take into account the effect of the daily financing charge and daily investor fee. Thisinformation is for illustrative purposes only and is not indicative of future results or performance. In Figure 5.2, the percentage change in the CINV of the ETN daily index borrow cost and daily investor fee. At the end over the course of each week is presented in comparison of Week 2, the index level was the same as on the date of with the percentage change achieved by multiplying the purchase, but ETN performance was slightly negative due weekly index performance by the applicable participation to negative effect of the daily index borrow cost and the at the end of the previous week (multiplied by negative daily investor fee outweighing the positive effect of the one), which does not include the effect of the daily interest, interest earned on the T-Bill Amount.

10 iPath For a graphical illustration of the participation of the iPath Long ETNs and the iPath Short ETNs, please see Figure 6. FIGURE 6 Participation for iPath Long and Short Notes Hypothetical “Participation” for iPath Short ETNs corresponding to changes in level of the underlying index over a course of a single trading day, together with the applicable Intraday Indicative Note Value (“IINV”) and Intraday Short Index Amount† n Participation is equal to Intraday Long Index Amount divided by Intraday Indicative Note Value n Positive underlying index performance decreases Participation n Negative underlying index performance increases Participation Financing Level** $100 Intraday Index Long Amount $ IINV 140 $240 Index gains 20% Financing Level* ETN gains 40% Participation = 1.70 $100 Long Index loses 25% Index Amount* ETN loses 43% $200 IINV* $100 Index loses 10% ETN loses 20% Financing Level** Participation = 2 .00 Intraday $100 Long Amount Index * Hypothetical values at the start of the trading day in this example. IINV $180 ** Note: For purposes of these hypothetical examples, which focus on $80 the effects of changes in the index value on the participation, the effects of the daily investor fee and the daily financing charge have not been taken into account in the financing level. Participation = 2.25 † Please see the applicable prospectus for more details on defined terms “Intraday Indicative Note Value” and “Intraday Long Index Amount,” as well as other defined terms herein.

The Basics of iPath® Leveraged Exchange Traded Notes 11 Hypothetical “Participation” for iPath Short ETNs corresponding to changes in level of the underlying index over a course of a single trading day, together with the applicable Intraday Indicative Note Value (“IINV”) and Intraday Short Index Amount† n Participation is equal to Intraday Short Index Amount divided by Intraday Indicative Note Value n Positive underlying index performance decreases Participation n Negative underlying index performance increases Participation Intraday Short Amount Index T-Bill $240 Amount** $300 IINV Short Index gains 20% $60 Index ETN loses 40% Amount* Participation = 4.00 T-Bill $200 Amount* Index loses 25% $300 ETN gains 100% IINV* Index loses 10% $100 ETN gains 20% Intraday Index Short Participation = 2.00 Amount $180 Amount** T-Bill $300 * Hypothetical values at the start of the trading day in this example. ** Note: For purposes of these hypothetical examples, which focus on the $IINV 120 effects of changes in the index value on the participation, the effects of the daily investor fee, the daily index borrow cost and the daily interest Participation = 1.50 have not been taken into account in the T-Bill Amount. † Please see the applicable prospectus for more details on defined terms “Intraday Indicative Note Value” and “Intraday Long Index Amount,” as well as other defined terms herein. Thisinformation is for illustrative purposes onlyand isnot indicative of future results or performance.

12 iPath Uses of Participation In the first example in the table above, the aggregate The participation of each series of iPath ETNs is intended notional exposure to the underlying index, as of the time at to approximate the ratio of (1) the value of the notional which the CINV and the participation listed above are exposure per ETN to the performance of the applicable published, is $22,500.00, calculated as follows: underlying index relative to (2) the value of each ETN. Approximate aggregate index exposure = Therefore, the participation can be used to approximate the $22,500.00 = ($125 x 100 x 1.80) value of an investment in an iPath ETN with an aggregate dollar amount notionally exposed to the underlying index. In the second example in the table above, the aggregate Conversely, the participation can be used to approximate a notional exposure to the underlying index, as of the time at given dollar amount of exposure to the underlying index which the CINV and the participation listed above are with a specific number of iPath ETNs that would represent published, is $34,440.00, calculated as follows: in aggregate such exposure to the underlying index. When Approximate aggregate index exposure = we refer to an “exposure” to an underlying index or “index $34,440.00 = ($123 x 100 x 2.80) exposure,” we mean the equivalent dollar amount of equity securities composing the underlying index that would be In both examples, the aggregate notional exposure to the required to approximate the returns on the relevant iPath index does not account for the applicable costs, fees and ETN without taking into account the effect of the charges of the relevant iPath ETN. applicable costs, fees and charges on the value of the relevant iPath ETN. Participation Example 2: In this hypothetical example, we show how the participation Two examples are given below: can be used to determine how many ETNs are required to provide an aggregate notional exposure (without taking into Participation Example 1: account the applicable costs, fees and charges) to the In this hypothetical example, we show the aggregate underlying index of $100,000. notional exposure to the underlying index of an investment of an iPath ETN having the following CINVs and The example on the next page shows the aggregate value participations at a given time: and number of iPath ETNs that an investor desiring a Number of ETNs $100,000 exposure to the underlying index (without taking CINV Participation Purchased into account the applicable costs, fees and charges) would $125 100 1.80 need to purchase, if the participation at the time of $123 100 2.80 purchase was 2, in one case, and 2.5 in the other case: For illustrative purposes only.

The Basics of iPath® Leveraged Exchange Traded Notes 13 FIGURE 7 Hypothetical Investment Index Exposure $100,000 Index Exposure $100,000 iPath ETN Market Price $50 iPath ETN Market Price $50 Participation 2 Participation 2.5 iPath index exposure exposure needed to maintain $50,000 index iPath exposure exposure needed to maintain $40,000 # of iPath ETNs needed 1,000 # of iPath ETNs needed 800 This information is for illustrative purposes only and is not indicative of future results or performance. Portfolio Applications and Benefits Risks and Considerations The iPath ETNs seek to provide investment alternatives for An investment in the iPath ETNs involves risks including investors who have: uncertain principal repayment and potential negative n Strong directional views of the market, and specifically effects of leverage. Because the potential investment of the performance of the relevant underlying index; will be leveraged, any change in the level of the applicable n Hedging needs for existing portfolio exposures; underlying index would have a significant impact on the n Risk/return management needs; and performance of the ETNs, either long or short, including n Arbitrage strategies in place. triggering an automatic termination event, and investors could lose some or all of their invested principal. Market risk with the following key features: is another consideration, given that the returns on each n Mitigated impact from path dependency resulting from series of the ETNs are linked to leveraged returns of an the daily volatility of an index, when compared to typical index linked to equity securities. See the “Risk Factors” leveraged ETFs;6 sections in the applicable prospectus supplement and 7 n Zero tracking error; and prospectus for more information on the risks relating to the n Daily liquidity. iPath ETNs. iPath ETNs may not be suitable for investors who: The iPath ETNs seek to give investors access to leveraged n Are not willing to be exposed to a leveraged or inverse returns in a transparent and cost effective vehicle. By investment in general or to a leveraged or inverse eliminating the path dependency of the notes on index investment linked to the underlying index in particular; returns, the iPath ETNs seek to provide investors with n Are not prepared to assume the relevant costs and fees access to leveraged strategies without having to manage or associated with the iPath ETNs; monitor their positions on a day to day basis. For more n Are seeking a guaranteed minimum return on their information, please visit www.iPathETN.com. investment or current income from their investment; or n Do not understand how leverage or shorting can affect the returns of investments. 6. Subject to automatic redemption feature. 7. Subject to automatic redemption feature. Tracking error refers to the under/over performance differential of an ETN versus its benchmark index over a given time period, after accounting for the ETN’s fees. One cannot invest directly in an index.

14 iPath Selected Risk Considerations markets traded in . Additional the U.S .special or other risks longer associated -established with international securities An investment in the iPath ETNs described herein (the securities may include less rigorous regulation of securities “ETNs”) involves risks. Selected risks are summarized here, markets, different accounting and disclosure standards, but we urge you to read the more detailed explanation of government interference, higher inflation, and social, risks described under “Risk Factors” in the applicable economic, and political uncertainties. prospectus supplement and pricing supplement. The Performance of the Underlying Indices are You May Lose Some or All of Your Principal: The ETNs are Unpredictable: An investment in the ETNs is subject to risks exposed to any change in the level of the underlying index associated with fluctuations, particularly a decline, in the between the inception date and the applicable valuation date. performance of the underlying index. Because the Additionally, if the level of the underlying index is insufficient performance of such index is linked to futures contracts on to offset the negative effect of the investor fee and other ® the CBOE Volatility Index (the “VIX Index”), the performance applicable costs, you will lose some or all of your investment of the underlying index will depend on many factors including, at maturity or upon redemption, even if the value of such ® the level of the S&P 500 Index, the prices of options on the index has increased or decreased, as the case may be. ® S&P 500 Index, and the level of the VIX Index which may Because the ETNs are subject to an investor fee and any change unpredictably, affecting the value of futures contracts other applicable costs, the return on the ETNs will always be on the VIX Index and, consequently, the level of the underlying lower than the total return on a direct investment in the index are index. Additional factors that may contribute to fluctuations in components. The ETNs riskier than ordinary unsecured debt securities and have no principal protection. forward the level volatility of such index levels include of the U prevailing .S. stock market markets prices and and the Credit of Barclays Bank PLC: The ETNs are unsecured debt equity securities included in the S&P 500® Index, the obligations either directly of or the indirectly, issuer, Barclays an obligation Bank of PLC, or guaranteed and are not, by prevailing futures contracts market prices on the of VIX options Index, on the or any VIX Index, other financial relevant any third party. Any payment to be made on the ETNs, instruments related to the S&P 500® Index and the VIX Index, including depends on any the payment ability of at Barclays maturity Bank or upon PLC to redemption, satisfy its counter interest equity rates, supply derivative and markets demand as in well the as listed hedging and over activities -the- obligations perceived creditworthiness as they come due of .Barclays As a result, Bank the PLC actual will affect and in the equity-linked structured product markets. Your ETNs Are Not Linked to the VIX Index: The value of the market value, if any, of the ETNs prior to maturity or your ETNs will be linked to the value of the underlying index, redemption. In addition, in the event Barclays Bank PLC were and your ability to benefit from any rise or fall in the level of to default on its obligations, you may not receive any the VIX Index is limited. The index underlying your ETNs is amounts owed to you under the terms of the ETNs. Issuer Redemption: If specified in the applicable prospectus, VIX based Index upon . These holding futures a rolling will long not position necessarily in futures track on the the series Barclays of ETNs Bank PLC (in whole will have but not the in right part) to at redeem its sole or discretion “call” a from performance increases of in the the VIX level Index of . the Your VIX ETNs Index may because not benefit such inception and without date your until consent and including on any maturity trading .day on or after the increases futures to will rise not . Accordingly, necessarily a cause hypothetical the level investment of VIX Index that was linked directly to the VIX Index could generate a higher Automatic Redemption: If specified in the applicable return than your ETNs. series prospectus, of ETNs Barclays (in whole Bank only, PLC but will not automatically in part) at the redeem specified a Leverage Risk: Because an investment in the ETNs is automatic or on the redemption final valuation value date, if, on the any intraday valuation indicative date prior note to leveraged, have a greater changes impact in on the the level payout of the on underlying the ETNs than index on will a applicable value of the level ETNs specified becomes in the prospectus less than. or equal to the payout any decrease on securities or increase, that are as the not case so leveraged may be in . In the particular, level of the underlying index will result in a significantly greater Market and Volatility Risk: The market value of the ETNs may decrease in the payment at maturity or upon redemption, be influenced by many unpredictable factors and may fluctuate and an investor will suffer losses on an investment in the between the date you purchase them and the maturity date or ETNs substantially greater than an investor would if the ETNs redemption date. You may also sustain a significant loss if you did not contain a leverage component. sell influence your ETNs the market in the value secondary of the market ETNs. Factors include that prevailing may A Trading Market for the ETNs May Not Develop: Although market included prices in the of underlying the U.S. stock index, markets, and prevailing the index market components prices of may the ETNs not develop are listed and on NYSE the liquidity Arca, a of trading the ETNs market may for be the limited, ETNs to options such on index; such and index supply or any and other demand financial for the instruments ETNs, including related as we are not required to maintain any listing of the ETNs. No Interest Payments from the ETNs: You may not receive economic, financial, political, regulatory, geographical or judicial any interest payments on the ETNs. events instruments that related affect the to such level index of such . index or other financial Restrictions on the Minimum Number of ETNs and Date Restrictions for Redemptions: You must redeem at least Your Return May Be Affected By Factors Affecting 25,000 or 50,000 (depending on the series) ETNs of the International Security Markets: The international equities same series at one time in order to exercise your right to underlying certain indices sponsored by MSCI, Inc. may have redeem your ETNs on any redemption date. You may only less liquidity and could be more volatile than the securities redeem your ETNs on a redemption date if we receive a

The Basics of iPath® Leveraged Exchange Traded Notes 15 notice set forth of in redemption the pricing from supplement you by .certain dates and times as permission first contacting is required MSCI . Under to determine no circumstances whether may MSCI’s any person or entity claim any affiliation with MSCI without the Uncertain Tax Treatment: Significant aspects of the tax prior written permission of MSCI. treatment of the ETNs are uncertain. You should consult your own tax advisor about your own tax situation. “Standard & Poor’s®”, “S&P®”, “S&P 500®” and “500” are Barclays Bank PLC has filed a registration statement (“S&P”) trademarks and have of Standard been licensed & Poor’s for use Financial by Barclays Services Bank PLC LLC. (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you The S&P ETNs and are S&P not makes sponsored, no endorsed, representation sold or regarding promoted the by should read the prospectus and other documents Barclays Bank PLC has filed with the SEC for more complete advisability of investing in the ETNs. information about the issuer and this offering. You may “Standard & Poor’s®”, “S&P®”, “S&P 500®”, “Standard & Poor’s get these documents for free by visiting www.iPathETN. 500TM”, “S&P 500 VIX Mid-Term FuturesTM” are trademarks of Alternatively, com or EDGAR Barclays on the Bank SEC PLC website will arrange at www for .Barclays sec.gov. Standard been licensed & Poor’s for Financial use by Barclays Services Bank LLC (“S&P”) PLC. “VIX” and have is a Capital calling Inc toll.- free to send 1-877 you -764 the- prospectus 7284, or you if you may request request it by a registered Exchange, Incorporated trademark (“CBOE”) of the and Chicago has been Board licensed Options for copy from any other dealer participating in the offering. use promoted by S&P by . The S&P ETNs or the are not CBOE sponsored, . S&P and endorsed, CBOE make sold no or BlackRock Investments, LLC, assists in the promotion of the representation, condition or warranty, express or implied, to iPath ETNs. The ETNs may be sold throughout the day on the exchange regarding the owners the of advisability the ETNs of or investing any member in securities of the generally public there through are any tax brokerage consequences account in the . Commissions event of sale, may redemption apply and performance or in the ETNs . or in the ability of either index to track market or maturity of ETNs. ® ® The MSCI indexes are the exclusive property of MSCI, Inc. “Russell trademarks 1000 of Frank Index” Russell and Company “Russell and 2000 have been Index” licensed are (“MSCI”) mark(s) of . MSCI MSCI or and its the affiliates MSCI and index have names been licensed are service for for endorsed, use by sold, Barclays or promoted Bank PLC by . The Frank ETNs Russell are not Company sponsored, and securities use for certain referred purposes to herein by Barclays are not sponsored, Bank PLC. The endorsed, financial or the Frank advisability Russell Company of investing makes in the no ETNs representation . regarding promoted by MSCI, and MSCI bears no liability with respect ©2010-2012 Barclays Bank PLC. All rights reserved. iPath, iPath to any such financial securities. The relevant pricing ETNs and the iPath logo are registered trademarks of Barclays supplement contains a more detailed description of the Bank PLC. All other trademarks, servicemarks or registered limited relationship MSCI has with Barclays Bank PLC and any trademarks are the property, and used with the permission, of related financial securities. No purchaser, seller or holder of their respective owners. 3333-03_R1_v03TP-2/12 this to any product, MSCI or trade any other name, person trademark or entity, or should service use mark or refer to sponsor, endorse, market or promote this product without Not FDIC Insured No Bank Guarantee May Lose Value

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