NEW YORK The U.S.
Securities and Exchange Commission (SEC) has delayed its
decision on whether to allow asset manager BlackRock Inc. to
list and trade shares in a physical copper exchange-traded fund
The SEC trading and markets
division said it will decide by Feb. 22 whether to allow the
New York Stock Exchange (NYSE) to amend its rules so the
proposed ETF shares can list and trade on the exchange.
"The commission finds it
appropriate to designate a longer period within which to issue
an order approving or disapproving the proposed rule change so
that it has sufficient time to consider the proposed rule
change and the issues raised in the comment letters that have
been admitted in response to the proposed rule change," the SEC
Copper ETFs have been fiercely
opposed by copper consumers who believe the funds will distort
prices and create an artificial market tightness.
Consumers were dealt a blow
recently when the SEC said it would allow the NYSE to amend its
rules to accommodate a physical copper ETF sponsored by
JPMorgan & Chase Co. (
amm.com, Dec. 17).
The opposition has been led
largely by a consortium comprising consumers Southwire Co.,
Carrollton, Ga.; Encore Wire Corp., McKinney, Texas;
London-based Luvata UK Ltd.; AmRod Corp., Newark, N.J.; and
metals-focused hedge fund RK Capital Management LLC,
BlackRock has refuted the
suggestion that the product would remove copper from the market
and distort prices in todays well-supplied market,
estimating that the global warrantable copper supply totaled
nearly 2.93 million tonnes as of July. Of this, almost 1.36
million tonnes of liquid warrantable copper stocks are
available, BlackRock said.
The initial size of the proposed
ETF is 121,200 tonnes, but BlackRock has said if the product is
a success it could apply to increase its size.
It also said it expects that
much of the initial demand for ETF shares will not necessarily
represent new incremental investment demand for copper, but
"rather a reallocation of current investments in physical
copper by professional copper market participants."