Martin Graham, Director of Markets at the London Stock Exchange, said:
"London was one of the first exchanges in the world to list Gold and Oil Securities, and we are delighted to be pioneers in becoming the first Exchange to offer investors a way to access a broad range of commodities without the need to trade futures and options. It will be the first time in the City's modern history investors have had such straightforward access to these commodities through London's marketplaces, and the first time that all of these commodities have been available through the same market and the same time-zone."
"Our new commodities segment is a demonstration of our commitment to giving investors more efficient and transparent ways to create balanced investment portfolios. With 32 exchange traded commodities, an expanding ETFs segment giving access to global equity and bond indices, and REITS set to offer pure property exposure from 2007, the London Stock Exchange is increasingly becoming a multi-asset market."
Commenting on the launch of the ETCs, Graham Tuckwell, Chairman of ETF Securities, said:
“We designed ETCs to be simple and secure, open-ended securities. They have lowered many of the barriers that previously prevented some investors from investing in commodities including access, trading and operational risks, custody, and transaction costs. ETCs also provide a pure way of tracking a commodity rather than trying to replicate exposure by trading shares of commodity companies – many of which do not correlate to the underlying commodity, if available at all.
“ETCs do not involve any of the difficulties with buying and then managing a futures position - such as worrying about margin calls, contracts expiring and rolling positions - or in buying and storing physical commodities. The new securities track indices created by Dow Jones Indexes and AIG and each individual commodity index tracks a designated futures contract and is designed to reflect the returns from investing in commodities.”
The new Exchange Traded Commodities market will include securities tracking a range of commodities indices covering the energy, metals and agriculture markets. In addition there will be 19 individual commodity trackers, alongside the existing Gold and Oil Securities.
Traded on SETSmm, the commodities segment will offer a bespoke trading environment, and ready access to pricing information. The Exchange Traded Commodities will settle in CREST, can be traded stamp-duty free and are eligible for inclusion in SIPPs.
