Credit Suisse Securities plans to kill three of its four Elements-branded exchange-traded notes. The firm said last week that due to trading volumes insufficient to support an exchange-traded product, the three ETNs would be delisted from the NYSE Arca by April 3.
The three ETNs, the Elements MLCX Gold Index ETN (GOE), the Elements MLCX Livestock Index ETN (LSO) and the Elements MLCX Precious Metals Plus Index (PMY) may continue to trade on an over-the-counter basis. This might be the first time an exchange-traded product trades this way. If this occurs, the intraday indicative values for the securities will no longer be published, but the daily NAV would be after the closing bell.
Credit Suisse has no plans to delist the fourth ETN, the Elements Credit Suisse Global Warming ETN (GWO).
“However, there is no assurance that the GWO ETNs will continue to be listed on NYSE Arca or another securities exchange,” the statement added. “In addition, from time to time Credit Suisse may decide, at its sole discretion, to issue additional units of the GWO ETNs.”
IndexUniverse reports that the Securities and Exchange Commission had contacted Credit Suisse in late February regarding “extraordinary” trading and price movements linked to GOE. At the same time, Credit Suisse said it didn’t plan on issuing any new shares of the ETN and that there was no lead market maker on the NYSE assigned to make a market for the fund.
Elements is the brand name for a consortium made up of issuers and distributors. In addition to Credit Suisse, Deutsche Bank and Swedish Export Credit have issued under the Elements name. Merrill Lynch and Nuveen Investments are the consortium’s distributors. Five other Elements ETNs have been delisted for lack of assets. In October, nine months after they launched, Deutsch Bank closed five currency ETNs it had issued under the Elements brand.