SEC Delays JP Morgan Copper ETF...Again
The Securities and Exchange Commission again delayed ruling on J.P. Morgan Chase's (NYSE: JPM) plans to launch an ETF backed by physical holdings of copper. In setting a new deadline of December 14 to rule on one of two planned ETFs, the SEC said it needs more time to consider the issues involved, Reuters reported.
The idea of physically-backed copper ETFs has been controversial since it first popped up two years ago. At that time, J.P. Morgan, Deutsche Bank (NYSE: DB), ETF Securities and BlackRock (NYSE: BLK), parent company of ETF giant iShares, signaled plans to launch physical copper ETFs.
At that time, some analysts said a physically-backed copper ETF could send the price of the red metal surging by removing supply from the market. There is also the issue of high storage costs for the copper, which could prompt higher fees for expense ratios.
A J.P. Morgan filing from earlier this year said the bank will use its warehouse company Henry Bath Group to store the metal in both on- and off-warrant facilities initially in the Netherlands, Singapore, South Korea, Shanghai, China and the U.S.
BlackRock and J.P. Morgan have argued that a copper fund that acts in similar fashion to the wildly popular SPDR Gold Shares (NYSE: GLD) or the iShares Silver Trust (NYSE: SLV) will allow smaller investors to get easier access to copper, Reuters reported. However, investors already have a few ETF options for copper exposure, including the iPath DJ-UBS Copper TR Sub-Index ETN (NYSE: JJC) and the Global X Copper Miners ETF (NYSE: COPX), among other products.
The SEC is due to rule on another fund, the iShares Copper Trust proposed by BlackRock, by December 24, but that can be extended for another 60 days, according to Reuters.
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