At least one commodities ETF is debating picking up its stakes and moving offshore as a way to escape from the Commodity Futures Trading Commission. John Hyland, chief investment officer of the U.S. Natural Gas Fund, told the Wall Street Journal
that the fund could invest in over-the-counter swaps markets or move its trades to offshore exchanges to avoid rules that limit the size of positions it takes in natural-gas securities.
In a SEC filing on Wednesday fund officials stated that they would halt issuing new units and creation units. Hyland later told the WSJ
that it makes little sense to issue new units with the overhanging possibility of limits imposed by the CFTC (see MFWire; "SEC's Nod isn't Enought to Relight the Natural Gas Fund
Most recently, Hyland told the paper that "We are taking steps now to get ahead of the process."
Regulators at the CFTC are worried that the quick growth of the fund -- it has added $3.8 billion in AUM from March to July -- has the potential to impact the natural-gas futures market. The paper reports that as much as 30 percent of all natural gas contracts are now held by the fund.
Stay ahead of the news ... Sign up for our email alerts now