The J.P. Morgan
] team has already waited almost two years for the SEC
to approve the JPM XF Physical Copper Trust
, and now they'll have to wait even longer. Josephine Mason of Reuters reports
that yesterday the regulatory agency "extended the consultation period," asking for more input from both the proposed ETF's proponents and its opponents.
The wire service expects the notice to officially appear in the Federal Register
next week, with comments from the public due 30 days from then and rebuttals to those comments due 15 days after that (i.e. mid-September).
J.P. Morgan first proposed
the ETF back in October 2010. U.S. industrial users of copper and at least one hedge fund and trader, Red Kite
, have voiced
strong opposition to the ETF, as the ETF and another similar proposed one could combined hold the majority of copper in "U.S.-based exchange-bonded warehouses." The ETF's opposition now stretches to the U.S. Senate. Reuters
reports that earlier this week Sen. Carl Levin
(D-Michigan) accused the proposed ETF of being likely to increase the volatility of the copper market. Car manufacturers are big users of copper.
On the flip side, the NYSE Arca
team is defending the ETF, calling criticisms "speculative and misplaced." According to Reuters
, the J.P. Morgan ETF would store up to $499,761,150 worth of copper (about 62,000 metric tons at $8,000 per metric ton), compared with a similar proposed ETF from BlackRock that would hold up to 121,200 metric tons. J.P. Morgan expects the ETF to launch with about $75 million, backed by more than 10,000 metric tons. The world market is 20 million metric tons.
First Trust offers
a copper index ETF. And Global X proposed
a copper miners ETF back in February 2010.
Neil Anderson, Managing Editor
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