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ETFS Commodity Securities Limited (“ETFS Commodity Securities”) and which are backed by matching contracts from AIG Financial Products Corp. and guaranteed by American International Group, Inc (collectively “AIG”).
ETF Securities is in discussion with its market makers, Authorised Participants and the Exchanges (London Stock Exchange, Deutsche Borse, Borsa Italiana and Euronext) to seek to have trading in ETCs issued by ETFS Commodity Securities resuming in an orderly fashion as soon as possible.
AIG continues to honour all of its obligations under our agreements with them, including processing all creations and redemptions in the usual manner and paying all redemptions due on time.
ETF Securities is actively working on possible ways of providing investors with liquidity, including:
Arranging suitable collateral for market-makers and/or helping to facilitate other structures which overcome credit risk on settlement; and
Permitting holders to lodge redemption notices directly with the issuer (currently only Authorised Participants are permitted to do this).
However, we can give no assurance as to whether these or other alternatives can be implemented at this stage.
ETF Securities is also working on a possible restructuring of the ETFS Commodity Securities product to reduce concerns about third-party credit risk. As part of this effort, ETF Securities has obtained the agreement of AIG to negotiate the terms of an agreement under which AIG would be obligated to provide to ETFS Commodity Securities, and at all times to maintain, collateral to support 100 per cent of the aggregate Prices of all the Commodity Contracts provided by AIG underlying the ETCs issued by ETFS Commodity Securities. ETF Securities hopes that such an
