21st Oct 2008 10:38
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR TO THE GENERAL PUBLIC IN THE UNITED KINGDOM OR JERSEY.
Announcement Tuesday 21 October 2008
Commodity Securities Collateralised and
Supplementary Prospectuses Published
ETF Securities Limited ("ETF Securities") is pleased to make the following announcement regarding the securities ("Commodity Securities") issued by ETFS Commodity Securities Limited ("CSL"), which are backed by matching contracts from AIG Financial Products Corp. ("AIG-FP") whose obligations to CSL are guaranteed by American International Group, Inc (collectively with AIG-FP, "AIG").
As previously announced, AIG-FP and CSL have signed agreements between each other and with The Bank of New York Mellon ("BNY Mellon") pursuant to which:
Pursuant to its agreement with CSL, AIG-FP is required to post collateral covering not less than 100% of the daily mark-to-market value of all Commodity Securities in issue; and
BNY Mellon, in its role as collateral manager, will hold the collateral in a separate account, into which AIG-FP must deposit the collateral and over which CSL may take control by delivering to BNY a notice of exclusive control.
Details of these agreements, including a description of the eligibility and rules for collateral, are set out in the following:
A Supplementary Prospectus relating to a programme for the issue of ETFS Classic and Forward Commodity Securities by ETFS Commodity Securities Limited; and
A Supplementary Prospectus relating to a programme for the issue of ETFS Short and Leveraged Commodity Securities by ETFS Commodity Securities Limited.
These have been approved by the UK Listing Authority and are available on our website and on the FSA document viewing website.
In accordance with the abovementioned agreements, on 20 October 2008 AIG posted collateral covering in excess of 100% of the value of all Commodity Securities on issue (calculated as of the previous days' close).
Going forward, the collateral will be valued each business day by BNY Mellon utilising generally recognized pricing information vendors, subject to an agreed dispute mechanism, and AIG-FP is required to transfer additional collateral if the value of the collateral in the account falls below the value of all Commodity Securities in issue.
AIG has continued at all times to honour all of its obligations with regard to Commodity Securities, including processing all creations and redemptions in the usual manner and paying all redemptions due on time.
Conference Call
ETF Securities will host a conference call on Monday 27 October 2008 at 9am UK time to discuss the details of the collateralisation of Commodity Securities.
Details of the call are available on the ETF Securities website and in response to email enquiries to [email protected]
For further information, please contact:
Hector McNeil, Head of Sales, ETF Securities Ltd
Tel: +44 20 7448 4330
Roman Townsend, Penrose Financial Tel: +44 20 7786 4875
This release does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any transferable securities to be issued by the ETF Securities Limited group ("ETFS"), nor shall it or any part of it nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision relating thereto. Any offer, invitation or solicitation shall be made solely by means of a prospectus and recipients of this release who are considering a purchase of securities are reminded that any such purchase should be made solely on the basis of the information contained in such prospectus and any supplementary prospectus(es). This release does not constitute any recommendation regarding the securities of ETFS. The communication of this release is not being made by, and this release has not been approved by, an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000 (the "FSMA"). Accordingly this release is not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of this release or any other document issued in connection with the offer and sale of any ETCs is only being made to and directed at those persons in the United Kingdom falling within the definition of Investment Professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"), or high net worth entities, and other persons to whom it may otherwise lawfully be communicated, falling within Article 49(1) of the Order or any person to whom it may otherwise lawfully be made (all such persons together being referred to as "relevant persons"). The communication of this release (or any other document issued in connection with the offer and sale of the ETCs) must not be acted upon or relied upon by persons who are not relevant persons. Persons distributing this release must satisfy themselves that it is lawful to do so. All applicable provisions of the FSMA must be complied with in respect of anything done in relation to the ETCs in, from or otherwise involving the United Kingdom. This is not an offer of securities for sale in the United States. Securities issued by the ETFS group ("Securities") have not been and will not be registered under the US Securities Act or any other applicable law of the United States. These Securities are being offered and sold only outside the United States to non-US persons in reliance on the exemption from registration provided by Regulation S of the US Securities Act. The Issuer has not been and does not intend to become registered as an investment company under the Investment Company Act and related rules. These Securities and any beneficial interest therein may not be reoffered, resold, pledged or otherwise transferred in the United States or to US persons. If the Issuer determines that any Security Holder is a Prohibited US Person (being a US Person who is not a "qualified purchaser" as defined in the Investment Company Act), the Issuer may redeem the Securities held by that Security Holder in accordance with the provisions described in the Prospectus. The Securities may not be purchased with plan assets of any "employee benefit plan" within the meaning of section 3(3) of the United States Employee Retirement Income Security Act of 1974, as amended ("ERISA"), any "plan" described in section 4975(e)(1) of the United States Internal Revenue Code of 1986, as amended (the "Code") or any entity whose underlying assets include "plan assets" of any of the foregoing by reason of an employee benefit plan's or other plan's investment in such entity, which employee benefit plan, plan or entity is subject to Title I of ERISA or section 4975 of the Code or any United States Federal, state, or local law or non-United States law that is substantially similar to the prohibited transaction provisions of section 406 of ERISA or section 4975 of the Code (any such employee benefit plan, plan or entity, a "Prohibited Benefit Plan Investor"). If the Issuer determines that any Security Holder is a Prohibited Benefit Plan Investor, the Issuer may redeem the Securities held by that Security Holder in accordance with the provisions described in the Prospectus relating to those Securities." "Dow Jones," "AIG®" "Dow Jones-AIG Commodity IndexSM," "DJ-AIGCISM", "Dow Jones-AIG Commodity 3-Month Forward Index" are service marks of Dow Jones & Company, Inc. and American International Group, Inc. ("American International Group"), as the case may be, and will be licensed for use for certain purposes by ETF Securities Ltd. ETCs based on the DJ-AIGCISM or related subindices (including single commodity sub-indices) or 3-Month Forward Indexes are not sponsored, endorsed, sold or promoted by Dow Jones, AIG Financial Products Corp. ("AIG-FP"), American International Group, or any of their respective subsidiaries or affiliates, and none of Dow Jones, AIGFP, American International Group, or any of their respective subsidiaries or affiliates, makes any representation regarding the advisability of investing in such product(s).
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