SEC Backs J.P. Morgan’s Plans for Physical Copper ETF

“NEW YORK—The Securities and Exchange Commission approved the first physical copper-backed exchange-traded fund despite complaints from some U.S. manufacturers and merchants that such a fund would make the metal more scarce.

The approval was the final hurdle for J.P. Morgan Chase JPM +0.89% & Co. to list the JPM XF Physical Copper Trust on NYSE NYX +0.68% Arca, a division of NYSE Euronext. The investment bank first filed its request for the fund in October 2010.

The trust would trade like a stock, though its shares would represent ownership of the physical copper stored on investors’ behalf. J.P. Morgan wasn’t immediately available for comment.

Copper users had opposed plans for the ETF in several comment letters to the SEC, saying it would kneecap the industry by locking up too much copper in investors’ hands. The gold market has seen investors’ hoard record levels of the precious metal since gold-backed ETFs were started in 2006. This has made copper users apprehensive that a copper-linked product would disturb a delicately balanced market that has faced a production shortfall for three of the past four years…”

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