ETF Securities Adds Second Counterparty To Commodities Platform

ETF Securities Limited, pioneers in specialist exchange traded products (ETPs), has enhanced its exchange traded commodity (ETC) platform, ETFS Commodity Securities Limited (CSL), with the addition of Bank of America Merrill Lynch, via Merrill Lynch Commodities Inc., (MLCI), as a second counterparty.

Bank of America Merrill Lynch will join UBS AG as a Commodity Contract Counterparty to CSL. Such appointment will become effective on or after 13th April 2011. This new arrangement is expected to generate even greater liquidity for investors and provide additional capacity to create Commodity Securities. The appointment of Bank of America Merrill Lynch is designed to reinforce further the growth of the platform and to provide even greater protection for investors.

Bank of America Merrill Lynch will be appointed as a counterparty on substantially the same terms as UBS and so will collateralise its obligations to CSL on a daily basis as occurs with UBS. Bank of America Merrill Lynch's obligations are also guaranteed by Bank of America Corporation; in the event of default in payment obligations by MLCI, Bank of America Corporation will meet any outstanding payment obligations of MLCI.

The CSL platform currently offers a range of 113 ETCs that provide classic, forward, short and leveraged exposure to commodities. Commodity ETPs have seen tremendous growth over the past few years; in the past 12 months assets on the CSL platform have increased 43% to reach US$7.2 billion (as at 28th February 2011).

Commenting on this new development, Graham Tuckwell, Chairman of ETF Securities, said:

"ETF Securities is dedicated to providing investors with innovative investment solutions. We are constantly looking for new ways to deliver greater transparency, liquidity and risk management and the addition of Bank of America Merrill Lynch as additional counterparty to our commodities platform is testimony to this.

In addition to being collateralised, Securities on the CSL platform will now be supported by both UBS and Bank of America Merrill Lynch. This complements what we achieved with our equity ETF platform ETF Exchange, which is currently enhanced by four separate counterparties, Bank of America Merrill Lynch, Barclays Capital, Citi and Rabobank International.

We look forward to working with Bank of America Merrill Lynch and UBS under this new, enhanced arrangement."

Trent Stout, Co-Head of Global Commodity Index & Products for Bank of America Merrill Lynch Global Commodities, said:

"Joining the CSL platform furthers our strategic relationship with ETF Securities and reiterates our dedication to helping product providers deliver innovative and liquid solutions to their customers. Serving as counterparty to this diverse market leading platform highlights our capabilities as a full service global commodities house. We look forward to working with ETF Securities and UBS on the CSL platform."


Commenting, Jon Fraade, Managing Director at UBS Investment Bank, said:

"The team at UBS is proud to have worked closely with ETF Securities since the launch of its market leading Dow Jones-UBS offerings in 2006 and to act as counterparty to their ETFS Commodity Securities Limited platform. ETF Securities is a recognized global leader in exchange traded products and we are pleased that Bank of America Merrill Lynch will join us as a counterparty to the platform, perfectly positioning it for future growth. UBS welcomes this new partnership as we continue to work on the platform."