Reuters Edge

U.S. platinum ETF launch ruled out

LONDON (Reuters) - Europe-based ETF Securities has no plans to list its new platinum fund, the world’s first, in the U.S. market and says another firm has dropped the idea of launching a similar product in the United States.

“I am of the view that it would be difficult to obtain the SEC approval and hence a listing of a platinum or palladium product in the U.S. market,” said Graham Tuckwell, chairman of ETF Securities, referring to the U.S. Securities and Exchange Commission, the market regulator.

“I would not be spending my money on such a project,” he told Reuters late on Thursday.

Platinum hit a record high of $1,395 an ounce in November on talk of the launch of a physically-backed exchange traded fund. The metal was quoted at $1,283/1,286 by 1058 GMT, up $3 from its previous close in New York.

ETF Securities was the first to list in London on April 24, with secondary listings in France, Germany and the Netherlands. Zurich Cantonal Bank followed with the launch of a similar product on May 10 in Switzerland.

The market was abuzz with talk this month that a U.S. bank was planning to launch a platinum ETF in the United States.

U.S.-listed gold and silver ETFs have been the most successful products among dozens of such funds based on precious metals introduced worldwide, but platinum miners and consumers are concerned platinum ETFs might upset what is a small and tightly balanced market.

Analysts said the U.S. auto lobby would strongly oppose any move to introduce a platinum product in the United States. The metal is mainly used in catalytic converters to clean vehicle exhaust fumes.


“My understanding is that they walked away from it because they didn’t feel it would ever be approved,” Tuckwell said, referring to the market talk.

“I don’t think there will be a listed platinum or palladium ETF in the United States.”

Last year, silver users associations strongly opposed a move by Barclays Global Investors to introduce a silver ETF in the United States on the grounds that the product had potential to reduce liquidity in the market and fuel price rises, but the ETF was finally approved by the SEC.

Barclays silver ETF SLV.A has so far accumulated 4,225 tonnes of the metal, more than a fifth of annual world mine production, since its launch in April last year and prices have surged 47 percent since the start of 2006.

Silver XAG= was quoted at $12.90/12.94 an ounce on Friday, up 8 cents from its previous close.

The Zurich ETF holds about 25,000 ounces of platinum. ETF Securities has attracted investment equal to about 12,000 ounces of the metal, with total investments in its five ETFs based on precious metals totaling more than $50 million.

ETF Securities manages 36 exchange-traded commodities, and has about $800 million of assets under its management.