Red Kite Wins Time In Fight Against Copper ETF

Jul 20 2012 | 2:12am ET

U.S. regulators will mull for a little longer a proposed copper exchange-traded fund that is bitterly opposed by a major commodities hedge fund.

The Securities and Exchange Commission said yesterday that it has asked JPMorgan Chase, which wants to launch the fund, for more information. The bank has been trying to get the JPM XF Physical Copper Trust off the ground for some two years, but will have to wait another week for a ruling from the SEC.

Opponents of the plan, including RK Capital Management, which runs the Red Kite hedge funds, will then have another 30 days to comment. The SEC's decision means that the ETF could not launch until mid-September at the earliest.

RK and copper users have warned that an ETF backed by physical copper would inflate prices, harm supply and "wreak havoc on the U.S. and global economy." RK's lawyers have said the ETF could eat up as much as one-third of the copper traded on the London Metal Exchange.

Last week, opponents of the ETF got some powerful support in the form of Sen. Carl Levin (D-Mich.), who warned that the fund could "create a bubble and burst cycle."

NYSE Arca, the exchange where the ETF would be listed, has argued that it will be too small to impact the global copper markets. But BlackRock has filed to launch an even larger physical copper ETF.


In Depth

bfinance: Fees Falling Across Asset Classes, Yet Overall Investor Costs Still Climbing

May 16 2017 | 9:53pm ET

Despite unprecedented attention on fees, new research from investment consultancy...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Risk-Based Compliance: Why Oversight Of Outsourcing Is Critical

May 10 2017 | 7:02pm ET

Compliance is notoriously one of the trickiest middle office functions for funds...

 

From the current issue of