What is the position of Exchange Traded Commodities contracts under COBS?
Exchange Traded Commodities (ETCs) appear to be increasingly attractive as instruments that give investors exposure to the commodities markets. Although it is possible for them to be structured in a number of ways, those we have seen so far (with the exception of the precious metals contracts mentioned below) are structured in a way that combines features of contracts for differences and transferable securities. This is because the investment instruments are generally listed on exchanges as debt securities, but they have no specified maturity date and do not pay interest. The main element of return on the investment is an amount related to the price of a commodity, or level of a commodity index or indexes. Some exchange-traded contracts for precious metals (for example, Gold Bullion Securities loan notes) are, however, listed as specialist debt securities. In the case of those structures that the FSA has considered, it has taken the view that they should not be regarded as contracts fo
