Deutsche Bank AG
(DB) yesterday announced that it will redeem all of its most bullish oil exchange-traded notes (ETNs), as the U.S. government plans to set stricter regulations in the commodities markets.
Deutsche said it would redeem outstanding PowerShares DB Crude Oil Double Long Exchange Traded Notes worth around $425 million. Deutsche plans to provide notice of the redemption on Sept 9.
Exchange-traded notes are one of Deutsche’s several exchange-traded products allowing investors to bet on moves in crude oil futures and are designed to return double the amount of any gain in WTI crude futures. Deutsche is redeeming the leveraged notes due to stricter position limits for energy futures held on NYMEX and other exchanges.
The U.S. Commodities Futures Trading Commission has been inclined towards placing more restrictions on exchange-traded funds and other investment vehicles that buy commodities futures. Managers of exchange-traded funds and notes designed to track commodity prices have been holding new share issuance in recent weeks, in anticipation of a crackdown by commodities regulators on speculative trading, which will limit the number of futures contracts they can buy.
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