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ETF Securities completes acquisition of Gold Bullion Securities products on London and Australian Securities Exchanges
23/10/08
- Management and ownership transfers to ETF Securities Limited
- No change to operations and trading
ETF Securities Limited, the innovator and pioneer of Exchange Traded Commodities (ETC), has formally completed the acquisition of the world’s first gold ETCs - Gold Bullion Securities listed on the London Stock Exchange (LSE: GBS) and the Australian Securities Exchange (ASX: GOLD).
Following an announcement made on 27 June 2008, the Jersey Financial Services Commission gave its formal approval of the acquisition on 17 October. As a result, Lyxor Gold Bullion Securities will refer to its original name of Gold Bullion Securities. The issuer’s name will remain unchanged as Gold Bullion Securities Limited.
Due to the acquisition, the Marketing Agent Agreement between Lyxor and Gold Bullion Holdings Ltd and Gold Bullion Securities Ltd., will expire. Lyxor will no longer act either as marketing and distribution agent, or as liquidity provider for Gold Bullion Securities on the various European Stock Exchanges where it is listed.
Graham Tuckwell, Chairman of ETF Securities, commented:
"The acquisition of these two gold ETCs demonstrates ETF Securities’ commitment to be the leading provider of exchange traded commodities. These products will fit well within our commodities platform and will be part of an expanded marketing effort for gold products in particular."
James Burton, CEO of World Gold Council, added:
"As the world's first two gold ETCs, GBS and GOLD have played a pivotal role in the development of the allocated, physically-backed, gold ETC/ETF market, which now represents more than 1093 tonnes of global gold demand.
“Gold is a unique asset. Its safe haven and diversification benefits are clear and it
bears no credit risk and therefore involves no counterparty and is no one else’s liability. These characteristics are extremely attractive to investors given the current financial environment.”
The change in ownership of Gold Bullion Securities will have no effect to the daily operations, management, pricing and liquidity of Gold Bullion Securities:
- Custody: HSBC Bank N.A. will continue to provide secured custodial services for all gold bullion. HSBC Bank N.A. is the world’s leading custodian for ETCs.
- Daily administration: Rawlinson and Hunter has provided for the past five years and will continue to administer the daily operations of Gold Bullion Securities. Rawlinson and Hunter provides administration services to over 120 ETCs.
- Market Making and Liquidity Provision: Société Générale has ceased to be a liquidity provider for GBS. Flow Traders B.V and Nyenburgh B.V. have signed contracts with various Exchanges in markets where Société Générale was previously quoting. Flow Traders B.V. and Nyenburgh B.V. are the leading market makers for ETCs in Europe. In addition, ETF Securities brings one of the largest pools of Authorised Participants and market makers with over 18 banks and trading firms currently trading the full range of ETCs.
- Credit risk: As stated in the relevant prospectus, both Gold Bullion Securities products are backed by allocated metal – uniquely identifiable bars which carry no bank credit risk. The gold bars are held in trust in London by the Custodian HSBC Bank USA N.A., the world’s leading Custodian for physically backed ETCs. The metal held with the Custodian must conform to the rules for Good Delivery of the London Bullion Market Association (LBMA). Securities are only issued once gold is confirmed as being deposited into the Company’s bullion account with the Custodian. Consistent with allocated gold, no precious metal is borrowed, loaned out and thus does not earn any income.
- Marketing: ETF Securities will replace Lyxor as Marketing Agent for all Gold Bullion Securities. ETF Securities currently manages approximately $7 billion in ETCs which trade in excess of $1 billion each week on five major European exchanges.
GBS is currently listed on the London Stock Exchange and trades in US Dollars (GBS) and British pence (GBSS). Gold Bullion Securities also trade in Euros on Euronext Paris (GBS), Deutsche Borse (GG9B) and Borsa Italiana (GBS). GOLD is listed on the Australian Securities Exchange and trades in Australian dollars. Assets for both products total US$3.3 billion.
Prior to the acquisition, ETF Securities had owned a one-third interest in Gold Bullion Holdings Limited, the World Gold Council (WGC) and members of the WGC had owned the remaining two-thirds. The WGC will continue to partner with ETF Securities on the marketing of gold ETCs with both Gold Bullion Securities and ETFS Physical Gold (PHAU) contributing to the Exchange Traded Gold platform.
In addition to the Gold Bullion Securities suite of products, ETF Securities now offers more than 120 ETCs, which give investors greater choice to implement different investment strategies with the choice of physical, long, forward, leveraged and short exposure to a wide range of commodity sectors. ETCs are simple to access as they are traded in three currencies (Euros, USD and Sterling) and listed on five major European Exchanges including the London Stock
Exchange, Euronext Paris, Euronext Amsterdam, Deutsche Borse and Borsa Italiana. Each Exchange has created unique ETC trading segments.
For further information, please contact:
Helen Burden
ETF Securities Ltd
Tel: +44 (0) 20 7448 4330
ETF Securities continues its series of conference calls for finance
professionals:
Title: Gold Bullion Securities (GBS) Purchase by ETFS – Background and Further Information
- Introduction to ETFS
- Introduction to GBS
- ETFS purchase of GBS
- Market making of GBS
- Conclusions
- Question and answer session
Date: 3rd November 08
Time: 11:00am and 15:00pm London Time
Click here to register
Notes to editors:
The management of ETF Securities Limited pioneered the development of Exchange Traded Commodities (ETCs), in 2003. Building on its success ETF Securities created the world’s first entire ETC platform which was listed on the London Stock Exchange in September 2006. Since then, ETF Securities has listed its ETCs on Europe’s major exchanges (Frankfurt, Paris, Amsterdam and Italy) with each exchange creating a separate ETC segment. With Classic, Forward, Short and Leveraged ETCs available, investors can execute most trading and investment strategies previously not possible.
To learn more about ETF Securities go to: www.etfsecurities.com
This press release 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 Gold Bullion 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 Gold Bullion 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. Securities issued by Gold Bullion Securities Limited (“Securities”) have not been and will not be registered under the US Securities Act or any other applicable law of the United States. These 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. These Securities and any beneficial interest therein may not be reoffered, resold, pledged or otherwise transferred in the United States or to US persons. The 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").
ETFS Securities Limited and Gold Bullion Securities Limited (as domiciled in Jersey) are each regulated by the Jersey Financial Services Commission.
To obtain a copy of the prospectus please visit the website at www.goldbullionsecurities.com
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