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ETF Securities offer investors easy access to commodities with the launch of exchange traded commodities on Deutsche Börse
02/11/06
- 31 ETCs to be launched on Deutsche Börse's Xetra platform in the largest ever listing of electronically tradable commodities
- First EUR quoted listings of ETCs in Europe
ETF Securities Ltd, the world pioneer of Exchange Traded Commodities (ETCs), will make an entire range of commodity investments available to German and European investors in easily tradable ETCs. This will take place via a listing of 31 ETCs on Deutsche Börse's Xetra platform, comprising 21 individual securities and 10 index securities.
ETCs are open-ended securities which can be bought and sold intraday by investors on a regulated exchange in the same way as any equity. They provide accurate and transparent commodity exposure to recognised benchmarks in a single trade. Investors can buy and sell the new ETCs through regulated brokers or approved market makers. ETCs can be traded with all the same order types available to equities, including market, limit and stop orders. The minimum trade size is one security and settlement is T+2 (trade date plus two business days) in Clearstream.
While investors have been able to access commodities for some time through structured products such as certificates and warrants, the new ETCs will be more easily accessible, transparent and secure. In addition, all 31 ETCs will be listed on the Official Market (Amtlicher Markt), and will trade electronically in a way similar to ETFs on Xetra. All 31 securities will be available for trading on Friday 3rd November.
This groundbreaking listing will enable investors across Europe to trade an expansive range of commodities in euros through an ordinary brokerage account in the same way as direct equities. Investors will also get easy access to all of the key commodity groups without having to engage in the trading or management of future contracts. 29 of the new ETCs work by tracking new commodities indices published by Dow Jones Indices, with the price of each ETC following its representative index. The other two ETCs are oil trackers and are backed by the Shell Group of companies.
The 21 separate classes of commodity securities available are:
- Aluminium
- Brent Oil
- Coffee
- Copper
- Corn
- Cotton
- Crude Oil
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- Gasoline
- Gold
- Heating Oil
- Lean Hogs
- Live Cattle
- Natural Gas
- Nickel
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- Silver
- Soybean Oil
- Soybeans
- Sugar
- Wheat
- WTI Oil
- Zinc
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The 10 baskets of commodities are:
- All Commodities
- Agriculture
- Energy
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- Ex-Energy
- Grains
- Industrial Metals
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- Livestock
- Petroleum
- Precious Metals
- Softs
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The launch of the range of ETCs on Deutsche Börse is in response to the overwhelming interest that investors have shown in ETFs and commodities. Currently Deutsche Börse's XTF segment is by far the largest ETF market place in Europe and accounts for approximately 47% of total European trading volume in exchange-traded funds. Exchange Traded Commodities are very similar to ETFs with regards to their structure, sharing many of their advantages. They are open-ended and cost-effective. They employ multiple market makers and have transparent pricing. They offer continuous on-exchange trading and allow investors to buy through ordinary brokerage accounts. They are also both non-maturing and traded on a regulated exchange and are liquid because demand and supply can be met when authorised participants create or redeem.
Nik Bienkowski, Head of Listings at ETF Securities Limited, comments:
"We are delighted to pioneer the opening of such a big range of direct commodities investment to investors and trading firms connected to Deutsche Börse's pan-European trading platform Xetra. ETFs have proved hugely popular on Deutsche Börse and the offering of our full product range on Xetra seemed a natural step for us following the huge interest in our ETCs which we listed on the London Stock Exchange recently.
"We designed our ETCs to be simple, secure, open-ended securities that would lower the many barriers that previously prevented investors from investing in commodities such as access, trading and operational risks, custody, and transaction costs.
"Through the listing of our ETC product portfolio on Deutsche Börse's Xetra platform investors will now, for the first time, be able to access 19 of the world's major commodities and 10 indices electronically in euros on one exchange."
Commenting on the listings, Rainer Riess, Managing Director Stock Market Business Development of Deutsche Börse, said:
"We are very pleased to provide both investors and traders with a new and easily accessible way of trading commodities on our electronic trading platform Xetra. With the launch of ETCs on Deutsche Börse, investors will be able to gain exposure to a broad range of euro quoted commodities on a single electronic platform for the first time. ETCs mark an excellent addition to our ETF offering and enable investors to benefit from even more extensive diversification opportunities."
The management of ETF Securities Limited pioneered the development of Exchange Traded Commodities (ETCs) with the world's first listing of an ETC, Gold Bullion Securities (GBS) in Australia, in 2003. The same team brought GBS to Euronext Paris with the first ever Euro quote in November 2005. These and related products now have approximately US$10 billion in assets. In 2005, ETF Securities listed the world's first oil ETC priced off oil futures on the London Stock Exchange. Volumes for the gold and oil ETCs have increased by 70% to 100% over the past 12 months.
The Deutsche Börse listing follows the successful launch by ETF Securities of 29 ETCs on the London Stock Exchange in September this year and the launch of oil ETCs on the Amsterdam Euronext earlier this summer.
Like an Exchange Traded Fund, the ETCs can be created and redeemed on a continuous basis by the Authorized Participants, who ensure substantial liquidity. The ETCs listed on Deutsche Börse will be priced and settled in euros, while currently, the LSE offering trades in dollars.
This advertisement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any transferable securities to be issued by ETFS Commodity Securities Limited, ETFS Oil Securities Limited or any other securities, nor shall it or any part of it nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision relating thereto. Any offer, invitation or solicitation shall be made solely by means of the prospectus and recipients of this advertisement who are considering a purchase of securities following distribution of the prospectus in connection therewith are reminded that any such purchase should be made solely on the basis of the information contained in such prospectus and any supplementary prospectus(es). This advertisement does not constitute any recommendation regarding the securities of ETFS Commodity Securities Limited.
The communication of this press release is not being made by, and this press release has not been approved by, an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000 (the "FSMA"). Accordingly this press release is not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of this press release or any other document issued in connection with the offer and sale of the ETCs is only being made to and directed at those persons in the United Kingdom falling within the definition of Investment Professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"), or high net worth entities, and other persons to whom it may otherwise lawfully be communicated, falling within Article 49(1) of the Order or any person to whom it may otherwise lawfully be made (all such persons together being referred to as "relevant persons"). The communication of this press release (or any other document issued in connection with the offer and sale of the ETCs) must not be acted upon or relied upon by persons who are not relevant persons. Persons distributing this press release must satisfy themselves that it is lawful to do so. All applicable provisions of the FSMA must be complied with in respect of anything done in relation to the ETCs in, from or otherwise involving the United Kingdom.
This is not an offer of securities for sale in the United States. Commodity Securities have not been and will not be registered under the US Securities Act or any other applicable law of the United States. Commodity Securities are being offered and sold only outside the United States to non-US persons in reliance on the exemption from registration provided by Regulation S of the US Securities Act. The Issuer has not been and does not intend to become registered as an investment company under the Investment Company Act and related rules. Commodity Securities and any beneficial interest therein may not be reoffered, resold, pledged or otherwise transferred in the United States or to US persons. If the Issuer determines that any Security Holder is a Prohibited US Person (being a US Person who is not a "qualified purchaser" as defined in the Investment Company Act), the Issuer may redeem the Commodity Securities held by that Security Holder in accordance with the provisions described in the Prospectus. Commodity Securities may not be purchased with plan assets of any "employee benefit plan" within the meaning of section 3(3) of the United States Employee Retirement Income Security Act of 1974, as amended ("ERISA"), any "plan" described in section 4975(e)(1) of the United States Internal Revenue Code of 1986, as amended (the "Code") or any entity whose underlying assets include "plan assets" of any of the foregoing by reason of an employee benefit plan's or other plan's investment in such entity, which employee benefit plan, plan or entity is subject to Title I of ERISA or section 4975 of the Code or any United States Federal, state, or local law or non-United States law that is substantially similar to the prohibited transaction provisions of section 406 of ERISA or section 4975 of the Code (any such employee benefit plan, plan or entity, a "Prohibited Benefit Plan Investor"). If the Issuer determines that any Security Holder is a Prohibited Benefit Plan Investor, the Issuer may redeem the Commodity Securities held by that Security Holder in accordance with the provisions described in the Prospectus."
"Dow Jones," "AIG®" "Dow Jones-AIG Commodity IndexSM," and DJ-AIGCISM" are service marks of Dow Jones & Company, Inc. and American International Group, Inc. ("American International Group"), as the case may be, and will be licensed for use for certain purposes by ETF Securities Ltd. ETCs based on the DJ-AIGCISM or related sub-indices (including single commodity sub-indices) are not sponsored, endorsed, sold or promoted by Dow Jones, AIG Financial Products Corp. ("AIG-FP"), American International Group, or any of their respective subsidiaries or affiliates, and none of Dow Jones, AIG-FP, American International Group, or any of their respective subsidiaries or affiliates, makes any representation regarding the advisability of investing in such product(s).
New Deutsche Börse website: www.boerse-frankfurt.com/etcs for more detailed information on the ETC market
To obtain a copy of the prospectus, please visit the website at www.etfsecurities.com
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