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Bank of Montreal warns against other banks in gold business

By: Chris Powell, Secretary/Treasurer, GATA

 -- Published: Tuesday, 7 June 2016 | Print  | Disqus 

Dear Friend of GATA and Gold:

A year ago February, Bank of Montreal announced plans to start a physical gold fund --

http://www.reuters.com/article/us-bank-of-montreal-gold-idUSKBN0L80BQ201...

-- and today the bank filed a prospectus with the U.S. Securities and Exchange Commission signifying intent to stock the fund with $500 million of gold, to denominate the shares in ounces, to vault the metal at the Royal Canadian Mint, and to give investors the option of withdrawing their investment in real metal:

http://www.sec.gov/Archives/edgar/data/927971/000121465916012033/d63160s...

The prospectus provides a few interesting and even amusing details:

-- It cautions that the "official sector" is active in the gold market and can affect prices, an acknowledgment that will never make it into any reports by mainstream financial news organizations.

-- The fund will not insure its assets, trusting the Royal Canadian Mint to protect them.

-- The fund is structured separate from the Bank of Montreal so that its assets will not be vulnerable to claims by creditors against the bank.

-- And -- the amusing part -- the fund seeks to eliminate "derivatives risk (i.e., the use of unallocated gold, gold certificates, exchange-traded products, derivatives, financial instruments, or any product that represents encumbered gold)," as well as "'empty vault risk' or gold bullion lending risk (i.e., the practice of the gold custodian lending, pledging, hypothecating, re-hypothecating, or otherwise encumbering any of the investors' underlying gold bullion)."

Imagine -- a bank warning against the shady practices in the gold market of other banks. While that's something else that will never make the mainstream financial news organizations, at least the word is getting around anyway.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

* * *

Support GATA by purchasing DVDs of GATA's London conference in August 2011 or GATA's Dawson City conference in August 2006:

http://www.goldrush21.com/order.html

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16


| Digg This Article
 -- Published: Tuesday, 7 June 2016 | E-Mail  | Print  | Source: GoldSeek.com

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