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I.M. Vronsky: The real El Dorado -- real estate or gold equities?
SEC Backs Rules to List iShares Silver Trust
By Kevin Drawbaugh
Reuters
Tuesday, March 21, 2006
http://today.reuters.com/investing/financeArticle.aspx?
type=governmentFilingsNews&storyID=2006-03-
21T213840Z_01_N21216480_RTRIDST_0_FINANCIAL-SEC-SILVER-UPDATE-3.XML
WASHINGTON -- The U.S. Securities and Exchange Commission said on
Tuesday it approved rule changes to allow the American Stock Exchange
to list shares in Barclays Plc's iShares Silver Trust, the first
silver-linked exchange-traded security.
The long-awaited SEC approval sent U.S. benchmark silver futures
soaring to a 22-year high on brisk speculative buying.
Before the Silver Trust shares can begin trading, the SEC must sign
off on a registration statement allowing them to be publicly
issued. "The registration statement has not yet been declared
effective," said SEC spokesman John Heine.
The iShares Silver Trust shares, to be offered by Barclays Global
Investor (BGI), are designed to track the price of the metal. BGI is
the leading exchange-traded fund provider.
"The Amex is glad to see the SEC make an important step toward making
the iShares Silver Trust available to the public. We look forward to
another BGI listing," said Cliff Weber, senior vice president of the
ETF marketplace at the Amex.
BGI sought approval for the trust in June and said it would be backed
by bullion held in vaults in London, with each share initially worth
about 10 ounces of silver.
"In effect, purchasing Silver Shares will provide investors a new
mechanism to participate in the silver market," the SEC said in its
rule-change approval posted on its Web site.
The amount of silver associated with each basket and each individual
share is expected to decrease over time as the trust pays maintenance
fees and other expenses, the agency said.
Silver Shares will be issued in baskets of 50,000 shares or multiples
thereof and will be traded on the Amex like other securities, such as
shares in the iShares COMEX GOLD Trust and the streetTracks Gold
Trust, the SEC said.
The sponsor fee for the shares is set at 0.5 percent of the net
assets of the trust, the SEC said.
At the close of trading on Tuesday, silver for May delivery at the
COMEX division of the New York Mercantile Exchange was at $10.5650
per ounce, up 20.3 cents, on the day.
Tuesday's intraday high on the COMEX of $10.58 was the priciest level
for silver futures seen since October 1983.
The Silver Users Association, a silver industry group, has come out
against the creation of the Barclays security amid concerns that it
could make silver too expensive or illiquid.
The SEC said in its order that the Silver Shares will increase the
efficiency and transparency of silver markets.
"The commission also does not believe that the Silver Shares are
likely to cause serious liquidity problems in the silver market," the
investor protection agency said.
The SEC order can be viewed in full at:
http://www.sec.gov/rules/sro/amex/2006/34-53521.pdf
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