Replies to post #14500 on FinancialAdvisor's College Class (FACC)

[mmayr]

Hey, I was just looking at that same thing! LOL

[mmayr]

It could have something to do with this. . .

Shine On – Part II: SEC Proposes Rules for Silver ETF Trading
by Charles Mackay, Tuesday January 24 2006

It’s coming. Despite roadblocks put up by the Silver Users Association, the Securities and Exchange Commission (SEC) in conjunction with the American Stock Exchange, has proposed new rules that will guide the trading of the upcoming silver exchange traded fund (ETF).

Let’s be clear – the proposed rule from the SEC governing trading of the silver ETF (Rule Change Relating to the Listing and Trading of Shares of the iShares® Silver Trust) should not be confused with the pending registration of iShares Silver Trust (SLV) shares with the SEC. These are separate matters. However the SEC action indicates the very clear intention of the SEC and AMEX to prepare for the eventual trading of the silver ETF. The proposed rule will take at least until February 7, 2006 to be approved, and possibly, it could be subject to further delays and/or changes.

The Silver Users Association (SUA) fears that the iShares Silver Trust will cause investors to buy silver – and that this will result in a shortage of silver for users. But the SEC sees no present shortage of silver available for trading. The SEC says in the rule proposal that “There are published sources that do suggest the significant size of the overall market.” There may be a shortage of silver in the future, but the SUA’s arguments shouldn’t prevent the registration of the silver ETF’s shares. The SEC has no authority to act on forecasts concerning the price and availability of silver. After all, isn’t the purpose of the market place to allow willing buyers and sellers to set the price of commodity or stock – and allow it to fluctuate over time? And since the silver ETF, by its own definition, requires the physical possession of the commodity – silver – there can be no trading of the silver ETF shares unless it manages to acquire silver.

The SEC previously approved the stock registration of a similar trust for gold, set trading rules, and granted them special exemptions. While there is no guarantee of approval, it looks increasingly likely it will follow the same course for the silver trust - and approve the registration of SLV.

Be prepared for the spotlight to shine on silver.


posted Tuesday January 24, 04 15 PM ET