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Oil Securities Ltd OILB Issue of ETFS Oil Securities Ltd



  Oil Securities Ltd (OILB) - Issue of ETFS Oil Securities Ltd

RNS Number : 0943Q
ETFS Oil Securities Limited
01 November 2012
 



FINAL TERMS

 

Dated 31 October 2012

 

                         ETFS OIL SECURITIES LIMITED

                                       

 (Incorporated and registered in Jersey under the Companies (Jersey) Law 1991
                                 (as amended)

                        with registered number 88371)

                                (the "Issuer")

                                       

                 Programme for the Issue of Energy Securities

                                       

                                   Issue of

                                       

                   5,000 ETFS WTI 1 year Energy Securities

                                       

                          (the "Energy Securities")

 

These Final Terms (as referred to in the prospectus (the "Prospectus") dated 7
September 2012 in relation to the above Programme) relate to the issue of  the 
Energy Securities  referred to  above. The  Energy Securities  have the  terms 
provided for in the trust instrument  dated 13 July 2005 (as amended)  between 
the  Issuer  and  The  Law  Debenture  Trust  Corporation  p.l.c.  as  Trustee 
constituting the Energy Securities. Terms used  in these Final Terms bear  the 
same meaning as in the Prospectus.

 

These Final  Terms have  been prepared  for  the purpose  of Article  5(4)  of 
Directive 2003/71/EC and must be read  in conjunction with the Prospectus  and 
any supplement, which are published in accordance with Article 14 of Directive
2003/71/EC on  the website  of  the Issuer:  http://www.etfsecurities.com.  In 
order to get the full information both the Prospectus (and any supplement) and
these Final Terms  must be read  in conjunction. A  summary of the  individual 
issue is annexed to these Final Terms.

 

The particulars in relation to this issue of Energy Securities are as follows:

 

ISIN:                                                JE00BIYPB605

 
Issue Date:                                          31/10/2012

 
Class:                                               ETFS WTI 1 year

 
Oil Major Company:                                   Shell Trading Switzerland

 
Near Entitlement                                     0.0745884

 
Next Entitlement                                     0.834805

 
Near Contract Price:                                 85.698

 
Next Contract Price:                                 89.04

 
Multiplier:                                          0.9795416

 
Creation Price:                                      79.0703330

 
Aggregate Number of Energy Securities to which these 5,000
Final Terms apply:

 

                                       

                                    Annex

                         Summary of Individual Issue

Summaries are made up of disclosure requirements known as 'Elements'.  These
elements are numbered in Sections A - E (A.1 - E.7).

This summary contains all the Elements required to be included in a summary
for this type of securities and Issuer.  Because some Elements are not
required to be addressed, there may be gaps in the numbering sequence of the
Elements.

Even though an Element may be required to be inserted into the summary because
of the type of securities and Issuer, it is possible that no relevant
information can be given regarding the Element.  In this case a short
description of the Element is included in the summary with the mention of 'not
applicable'.  The following summary is specific to the issue of the following
classes of Energy Securities to be issued pursuant to the final terms of the
Issuer dated 31 October 2012 (the "Final Terms"):

                                 ETFS WTI 1yr

                                       

Section A - Introduction and Warnings

 
A.1 Standard warning This summary should  be read  as an  introduction to  the 
    disclosure       base prospectus of  ETFS Oil Securities  Limited dated  7 
                     September  2012  (the  "Prospectus").   Any  decision  to 
                     invest in  the  Energy  Securities  should  be  based  on 
                     consideration  of  the  Prospectus  as  a  whole  by  the 
                     investor.  Where  a  claim relating  to  the  information 
                     contained in the  Prospectus is brought  before a  court, 
                     the  plaintiff   investor  might,   under  the   national 
                     legislation of the Member States, have to bear the  costs 
                     of  translating   the   Prospectus   before   the   legal 
                     proceedings are initiated. Civil liability attaches  only 
                     to those persons  who have tabled  the summary  including 
                     any translation  thereof,  but  only if  the  summary  is 
                     misleading, inaccurate or inconsistent when read together
                     with the other  parts of  the Prospectus or  it does  not 
                     provide, when read together with  the other parts of  the 
                     Prospectus, key  information in  order to  aid  investors 
                     when  considering  whether  to   invest  in  the   Energy 
                     Securities.

 

 

 
                                                                          
Section B - Issuer

 
B.1       Legal and commercial    ETFS  Oil   Securities  Limited   (the 
          name                    "Issuer").
                                                                          
                                   

                                   
B.2       Domicile/Legal          The  Issuer   is  a   public   company 
          form/Legislation/       incorporated and registered in  Jersey 
          Country of              under the Companies (Jersey) Law  1991 
          incorporation           (as amended)  with  registered  number 
                                  88371.                                  

                                   

                                   
B.16      Direct/ indirect        The shares  in  the  Issuer  are  held 
          control of the Issuer   entirely  by  ETFS  Holdings  (Jersey) 
                                  Limited ("HoldCo"), a holding  company 
                                  incorporated in Jersey.  The shares in
                                  HoldCo  are  directly  owned  by   ETF 
                                  Securities Limited ("ETFSL") which  is  
                                  also  incorporated   in  Jersey.   The 
                                  Issuer   is   neither   directly    or 
                                  indirectly owned or controlled by  any 
                                  other party to the programme.

                                   
B.20      Special purpose vehicle The Issuer has  been established as  a 
                                  special  purpose   vehicle   for   the 
                                  purpose   of   issuing   the    Energy  
                                  Securities as asset-backed securities.

                                   
B.21      Principal activities    The principal activity  of the  Issuer 
          and overview of the     is issuing  several  classes  of  debt 
          parties                 security  (the  "Energy   Securities") 
                                  which   are   backed   by   derivative 
                                  contracts  (the  "Energy   Contracts") 
                                  which provide exposure to movements in
                                  the prices of oil futures contracts of
                                  different   maturities   and    carbon 
                                  emissions      allowance       futures 
                                  contracts.  The Issuer has established
                                  a   programme   under   which   Energy 
                                  Securities may be issued from time  to 
                                  time, in  the  form  of  nine  classes 
                                  providing exposure to different  types 
                                  of   oil   futures   contracts   ("Oil 
                                  Securities") and  one class  providing 
                                  exposure to carbon emissions allowance
                                  futures     contracts      ("Emissions 
                                  Securities").

                                   

                                  Energy Securities can  be created  and 
                                  Redeemed on a daily basis by financial
                                  institutions              ("Authorised 
                                  Participants") who  (i)  have  entered 
                                  into an agreement entitled "Authorised
                                  Participant   Agreement"   with    the 
                                  Issuer; (ii)  have  certified  to  the 
                                  Issuer as  to their  status under  the 
                                  Financial  Services  and  Markets  Act 
                                  2000   ("FSMA");   and   (iii)    have 
                                  certified to the Issuer that they  are 
                                  not  collective   investment   schemes 
                                  regulated under Council Directive  No. 
                                  85/611/EEC   as    undertakings    for 
                                  collective investment in  transferable 
                                  securities (except that other  holders 
                                  of Energy Securities  may also  redeem 
                                  Energy  Securities  if  there  are  no 
                                  Authorised Participants).   All  other 
                                  parties  must  buy  and  sell   Energy 
                                  Securities  through   trading  on   an 
                                  exchange or market on which the Energy
                                  Securities are admitted to trading.

                                   

                                  The   Issuer   achieves   a   matching 
                                  exposure to the  Energy Securities  by 
                                  holding corresponding Energy Contracts
                                  purchased from one  or more Oil  Major 
                                  Companies.  An Oil Major Company is  a 
                                  company which is  either: a member  of 
                                  any of  the  six  western  oil  majors 
                                  (Shell,  Exxon   Mobil,   BP,   Total, 
                                  Chevron and Eni), or any other company
                                  which owns oil or has assets linked to  
                                  the oil  price and  has an  investment 
                                  grade credit rating.  Energy Contracts
                                  are purchased or to be purchased  from 
                                  an Oil  Major Company  pursuant to  an 
                                  omnibus Agreement with such Oil  Major 
                                  Company    (an    "Energy     Purchase 
                                  Agreement") entitling  the  Issuer  on 
                                  cancellation thereof or  sale back  to 
                                  the Oil Major Company to payment of an
                                  amount calculated by reference to  the 
                                  formula set out at C.15 (the "Price").
                                  At the  date of  this Prospectus,  the 
                                  Issuer has  entered into  arrangements 
                                  with one  Oil  Major  Company  only  - 
                                  Shell   Trading   Switzerland.   Shell 
                                  Treasury provides  credit support  for 
                                  the  payment   obligations  of   Shell 
                                  Trading Switzerland  under the  Energy 
                                  Contracts.

                                   

                                  Energy  Securities   are   constituted 
                                  under an agreement between the  Issuer 
                                  and the trustee for Security  Holders, 
                                  the Law  Debenture  Trust  Corporation 
                                  p.l.c. (the  "Trustee")  entitled  the 
                                  "Trust Instrument".  The Trustee holds
                                  all rights and entitlements under  the 
                                  Trust  Instrument  on  trust  for  any 
                                  person identified on the registers  as 
                                  holding  the  Energy  Securities  (the 
                                  "Security Holders").   The Issuer  and 
                                  the  Trustee  have   entered  into   a 
                                  separate Security Deed  in respect  of 
                                  each   pool   of   Energy    Contracts 
                                  attributable to  any class  of  Energy 
                                  Security  (each  a  "Pool")  and   the 
                                  rights and  entitlements held  by  the 
                                  Trustee under each  Security Deed  are 
                                  held by the Trustee  on trust for  the 
                                  Security Holders of the relevant class
                                  of Energy Security. 

                                   

                                  ETFS   Management   Company   (Jersey) 
                                  Limited ("ManJer"), a company which is
                                  wholly-owned by  ETFSL,  supplies,  or 
                                  will  arrange  the   supply  of,   all 
                                  management and administration services
                                  to  the  Issuer   and  pays  all   the 
                                  management and administration costs of
                                  the Issuer in return for a fee payable
                                  by the Issuer.

                                   
B.22      No financial statements Not applicable;  financial  statements 
                                  have been made  up as at  the date  of 
                                  this Prospectus.                        

                                   
B.23      Key historical           
          financial information
                                                                          

                                   
                                                        As at 31 December
                                                            2011          2010
                                                             USD           USD
                                  Current
Assets
                               Cash and Cash               4,006        32,238
Equivalents
                                  Trade and              169,578       218,001
Other Receivables
                               Energy                385,168,001   465,309,004
Contracts
                               Amounts                         -     1,294,327
Receivable Awaiting Settlement
                                  Total              385,341,585   466,853,570
Assets
                                  
Current Liabilities
                                Energy               385,168,001   465,309,004
Securities
                                Amounts                        -     1,294,327
Payable Awaiting Settlement
                                 Trade                   169,842       197,989
and Other Payables
                                   Total             385,337,843   466,801,320
Liabilities
                                   
Equity
                                Stated                     1,742         1,742
Capital
                               Retained                    2,000        50,508
Profits
                                  Total                    3,742        52,250
Equity
                                  Total              385,341,585   466,853,570
Equity and Liabilities
                                                                          
B.24      Material adverse change Not  applicable;  there  has  been  no 
                                  material   adverse   change   in   the 
                                  prospects of the Issuer since the date
                                  of   its   last   published    audited  
                                  financial statements

                                   
B.25      Underlying assets       The   underlying   for   the    Energy 
                                  Securities of  each  class,  on  which 
                                  they  are  secured,   is  the   Energy 
                                  Contracts  of  the  same  class,   the 
                                  Energy Purchase Agreement pursuant  to 
                                  which  they  are  purchased  (to   the 
                                  extent attributable to that class) and
                                  letters of credit issued in favour  of 
                                  the Issuer in respect of an Oil  Major 
                                  Company's obligations  to  the  Issuer 
                                  under the  Energy  Purchase  Agreement 
                                  (the "Letters of  Credit") in  respect 
                                  of that class. 

                                   

                                  The  Energy  Purchase  Agreement,  the 
                                  Energy Contracts  provided  thereunder 
                                  and  the   Letters  of   Credit   have 
                                  characteristics    that    demonstrate 
                                  capacity to produce  funds to  service 
                                  any payments  due and  payable on  the 
                                  Energy Securities.  Energy  Securities 
                                  of each  class  are backed  by  Energy 
                                  Contracts with corresponding terms and
                                  each  time  an   Energy  Security   is 
                                  created or redeemed a matching  amount 
                                  of Energy Contracts  are purchased  or 
                                  cancelled  by   the   Issuer.   Energy 
                                  Contracts will be  purchased from  one 
                                  or more Oil Major Companies.

                                   

                                  The Issuer  will decline  applications 
                                  for Energy Securities if it cannot for
                                  any  reason   purchase   corresponding 
                                  Energy Contracts  from  an  Oil  Major 
                                  Company.

                                   

                                  At the  date of  this Prospectus,  the 
                                  Issuer has  entered into  arrangements 
                                  with one  Oil  Major  Company  only  - 
                                  Shell   Trading   Switzerland.   Shell 
                                  Treasury provides  credit support  for 
                                  Shell Trading Switzerland. 

                                                                          

                                  Under the  Energy  Purchase  Agreement 
                                  there are  limits, both  daily and  in 
                                  aggregate, on  the  number  of  Energy 
                                  Contracts  that  can  be  created   or 
                                  cancelled at any time.  Creations  and 
                                  redemptions of  Energy Securities  are 
                                  subject to both daily limits and total
                                  aggregate limits, to match the  limits 
                                  on Energy Contracts.

                                   

                                  Shell    Trading    Switzerland    was 
                                  incorporated in  Switzerland with  the 
                                  name Shell Trading  Switzerland AG  in 
                                  accordance with the provisions of  the 
                                  Swiss Code of Obligations on 11  April 
                                  2005     (with     company      number 
                                  CH-170.3.028.260-0) and  is  a  wholly 
                                  owned  subsidiary  of  Shell  Overseas 
                                  Holdings Limited  which  is  itself  a 
                                  wholly-owned  member   of  the   Shell 
                                  Group.

                                   

                                  Shell Treasury  was  incorporated  and 
                                  registered  in   England   and   Wales 
                                  pursuant to the Companies Act 1985  on 
                                  17 November 1997  with company  number 
                                  3469401   and   is   a    wholly-owned 
                                  subsidiary  of  The  Shell   Petroleum 
                                  Company  Limited  which  is  itself  a 
                                  wholly-owned  member   of  the   Shell 
                                  Group.

                                   

                                  The  Issuer  is   a  special   purpose 
                                  company  whose  only  assets  are  the 
                                  Energy Contracts and so the ability of
                                  the Issuer to meet its obligations  in 
                                  relation to Energy Securities will  be 
                                  wholly dependent  on  its  receipt  of 
                                  payments under  Energy Contracts  from 
                                  Oil Major  Companies as  described  in 
                                  B.30.

                                   
B.26      Investment management   Not applicable;  there  is  no  active 
                                  management  of  the   assets  of   the 
                                  Issuer.                                 

                                   
B.27      Further securities      Further Energy Securities of any class
          backed by same assets   may be issued but each time an  Energy 
                                  Security  of  any   class  is   issued 
                                  corresponding Energy Contracts of  the 
                                  same class  will be  created and  will 
                                  form part of  the corresponding  Pool. 
                                  Such newly  issued  Energy  Securities  
                                  will be  fungible  with  all  existing 
                                  Energy Securities  of the  same  class 
                                  and will be  backed by  the assets  of 
                                  the same Pool.

                                   
B.28      Structure of the        Energy Securities  are constituted  by 
          transaction             the Trust Instrument.  Under the terms
                                  of the Trust  Instrument, the  Trustee 
                                  acts  as  Trustee  for  the   Security 
                                  Holders  of  each   class  of   Energy 
                                  Security.

                                   

                                  The  obligations  of  the  Issuer   in 
                                  respect  of  each   class  of   Energy 
                                  Security are secured by a charge  over  
                                  the   equivalent   class   of   Energy 
                                  Contracts under  the  Energy  Purchase 
                                  Agreement and Letters of Credit.

                                   

                                  A diagrammatic  representation of  the 
                                  principal aspects of the structure  as 
                                  currently in place appears below:

                                   
                                   

                                   

                                   

                                   

                                   

                                   

                                   
                                                                          
                                   

                                   

                                   

                                   

                                   

                                   

 
B.29      Description of the flow Authorised Participants will  approach 
          of funds                the Issuer with requests to create  or 
                                  redeem Energy Securities at the  price 
                                  calculated  on  the  relevant  day  in 
                                  accordance with  the formula  set  out 
                                  and described  in  C.15.   The  Issuer 
                                  will  then  purchase  or  redeem   the 
                                  equivalent number of Energy  Contracts 
                                  from  the  Oil  Major  Companies,   as 
                                  applicable.

                                   

                                  Application moneys for all Energy
                                  Securities must be paid by Authorised
                                  Participants directly to the relevant
                                  Oil Major Company from whom the
                                  corresponding Energy Contracts are
                                  being purchased by the Issuer, via
                                  CREST.  Legal title is transferred by
                                  means of the CREST system and
                                  evidenced by an entry on the register
                                  of Security Holders maintained by the
                                  Issuer's registrar - Computershare
                                  Investor Services (Jersey) Limited. 
                                  If an Authorised Participant does not
                                  make payment for the full amount of
                                  Energy Securities applied for on the    
                                  due date for payment or the following
                                  business day, the Issuer may elect by
                                  notice to the Authorised Participant
                                  to cancel the application.

                                  A Security Holder who is also an
                                  Authorised Participant may, at any
                                  time, by lodging a redemption request
                                  (in such form as the Issuer will
                                  determine from time to time) with the
                                  Issuer, require the redemption of all
                                  or any of its Energy Securities at the
                                  Price on the day such redemption
                                  request is submitted.  A Security
                                  Holder who is not also an Authorised
                                  Participant may only require the
                                  Redemption of any of its Energy
                                  Securities if, at the time, there are
                                  no Authorised Participants and the
                                  Security Holder submits a valid
                                  redemption request on such day. 
                                  Payment on the redemption of an Energy
                                  Security will be made by the Oil Major
                                  Company directly to the relevant
                                  Authorised Participant Redeeming the
                                  Energy Security, via CREST.

                                   
B.30      Originators   of    the The Energy Contracts  are and will  be 
          securitised assets      with the Oil Major Companies.  An  Oil 
                                  Major Company  is a  company which  is 
                                  either: a  member of  any of  the  six 
                                  western  oil   majors  (Shell,   Exxon 
                                  Mobil, BP, Total, Chevron and Eni), or
                                  any other company which owns oil,  the 
                                  rights to oil or has assets linked  to 
                                  the oil  price and  has an  investment 
                                  grade  credit  rating.  However,   the 
                                  aggregate amount  of Energy  Contracts 
                                  which  may  be  purchased  from   such 
                                  latter companies  must  be  less  than 
                                  half the  aggregate number  of  Energy 
                                  Contracts in any Pool.

                                   

                                  Shell    Trading    Switzerland    was 
                                  incorporated in  Switzerland with  the 
                                  name Shell Trading  Switzerland AG  in 
                                  accordance with the provisions of  the 
                                  Swiss Code of Obligations on 11  April 
                                  2005     (with     company      number  
                                  CH-170.3.028.260-0) and  is  a  wholly 
                                  owned  subsidiary  of  Shell  Overseas 
                                  Holdings Limited  which  is  itself  a 
                                  wholly  owned  member  of  the   Shell 
                                  Group.  It currently  has no  holdings 
                                  or interest in any other companies and
                                  carries on no  other activities  other 
                                  than  the  entering  into  of   Energy 
                                  Contracts   with   the   Issuer    and 
                                  ancillary    finance    and    hedging 
                                  arrangements with other members of the
                                  Shell   Group   to   facilitate    the 
                                  performance of  its obligations  under 
                                  the Energy Purchase Agreement.

                                   

                                  At the  date of  this Prospectus,  the 
                                  Issuer   has    only   entered    into 
                                  arrangements  with   one   Oil   Major 
                                  Company - Shell Trading Switzerland.

                                   
 

SECTION C - Securities                                                    

 
C.1       Type   and   class   of These Final Terms relate to the  issue 
          securities        being of the  following  classes  of  Energy 
          offered                 Securities to  be issued  pursuant  to 
                                  the Final Terms:

                                   

                                  Class        LSE Code ISIN
                                  ETFS WTI 1yr OSW1     JE00BIYPB605

                                   

                                  The following are the aggregate number
                                  of Energy  Securities to  which  these 
                                  Final Terms apply:

                                   

                                  Class        Number  to  which   Final 
                                               Terms apply
                                  ETFS WTI 1yr 5,000

                                   
                                                                          
                                  Energy   Securities   are    financial 
                                  instruments  designed  to  track   the 
                                  price of  oil or  emissions  allowance 
                                  futures.   Energy  Securities   enable 
                                  investors   to   gain   exposure    to 
                                  movements in  futures  prices  without 
                                  needing to purchase  or take  physical 
                                  delivery of  oil or  carbon  emissions 
                                  allowances  or  to  trade  in  futures 
                                  contracts, and  to buy  and sell  that 
                                  interest through trading that security
                                  on an exchange.  Energy Securities are
                                  designed to  give investors  a  "total 
                                  return" similar to that which could be
                                  achieved      from       a       fully 
                                  paid/collateralised    position     in 
                                  futures  contracts  of  the   relevant 
                                  maturity but without having to  manage 
                                  a futures position. Unlike managing  a 
                                  futures  position,  Energy  Securities 
                                  involve  no  rolling,  margin   calls, 
                                  expiry or futures brokerage.

                                   
C.2       Currency                The  Oil   Securities   being   issued 
                                  pursuant  to  the   Final  Terms   are 
                                  denominated in U.S. Dollars             

                                   
C.5       Restrictions         on Not applicable; the Energy  Securities 
          transfer                are freely transferable                 

                                   
                                                                          
C.8       Rights                  Energy  Securities  constitute  direct 
                                  and unconditional payment  obligations 
                                  of the  Issuer which  rank pari  passu 
                                  among themselves.

                                   

                                  Each Energy Security carries the right
                                  on redemption to payment of the higher
                                  of (i)  the Principal  Amount (as  set 
                                  out in C.12) for that class, and  (ii) 
                                  the price of that class of that Energy
                                  Security   on   the   applicable   day 
                                  determined using the  formula set  out 
                                  and described in C.15.

                                   

                                  Energy  Securities   are   constituted 
                                  under  the   Trust  Instrument.    The 
                                  Trustee   holds    all   rights    and 
                                  entitlements    under    the     Trust 
                                  Instrument on trust  for the  Security 
                                  Holders.  The Issuer  and the  Trustee 
                                  have entered into a separate  Security 
                                  Deed in respect of  each Pool and  the 
                                  rights and  entitlements held  by  the 
                                  Trustee under each  Security Deed  are 
                                  held by the Trustee  on trust for  the 
                                  Security Holders  of  that  particular 
                                  class of Energy  Security.  Under  the 
                                  terms  of  each  Security  Deed,   the 
                                  Issuer has assigned to the Trustee  by  
                                  way of security the contractual rights
                                  of the Issuer  relating to such  class 
                                  under the  Energy Purchase  Agreement, 
                                  and granted  a first-ranking  floating 
                                  charge in favour  of the Trustee  over 
                                  all of the Issuer's rights in relation
                                  to the  secured property  attributable 
                                  to the applicable Pool.

                                   

                                  The  Energy  Purchase  Agreement,  the 
                                  Authorised Participant Agreements, the
                                  Energy Contracts and all rights of the
                                  Issuer in  relation to  the Letter  of 
                                  Credit, to  the extent  applicable  to 
                                  each class of Energy Security, are all
                                  the subject of security granted by the
                                  Issuer in favour of the Trustee  under 
                                  the Security Deeds.

                                   

                                  The Issuer  holds  separate  pools  of 
                                  assets for each class of securities so
                                  that holders of a particular class  of 
                                  Energy   Security   will   only   have 
                                  recourse to  security granted  by  the 
                                  Issuer over  the Energy  Contracts  of 
                                  that same class.

                                   
C.11      Admission               Application has  been made  to the  UK 
                                  Listing  Authority   for  all   Energy 
                                  Securities issued within 12 months  of 
                                  the date  of  this  Prospectus  to  be 
                                  admitted to the  Official List and  to 
                                  the  London   Stock  Exchange,   which 
                                  operates a Regulated  Market, and  for 
                                  all  such  Energy  Securities  to   be 
                                  admitted to trading on the Main Market
                                  of the London Stock Exchange, which is
                                  part  of  its  Regulated  Market   for 
                                  listed  securities  (being  securities 
                                  admitted to the Official List).  It is
                                  the Issuer's intention that all Energy
                                  Securities issued  after the  date  of 
                                  this document will also be admitted to
                                  trading on the Main Market. 
                                                                          
                                   

                                  No  application   has   been   or   is 
                                  currently being  made  for  any  other 
                                  classes  of  Oil  Securities  or   the 
                                  Carbon Securities  to be  admitted  to 
                                  listing or trading on any exchange  or 
                                  market outside the  UK but the  Issuer 
                                  may cause such application to be  made 
                                  in respect of the Energy Securities of
                                  any  or  all   classes  on  any   such 
                                  exchanges   or    markets    in    its 
                                  discretion.

                                   

                                   
C.12      Minimum denomination    Each Energy Security issued pursuant
                                  to the Final terms has a Principal
                                  Amount as follows: 

                                   

                                  Class of Energy       Principal Amount  
                                  Security
                                  WTI 1yr               US$5.00

                                   

                                   
C.15      Value of the investment Price
          is  affected   by   the 
          value of the underlying The price of  each Energy Security  is 
          instruments             the  same   as   the  price   of   the 
                                  underlying Energy  Contract  which  is 
                                  calculated  in  accordance  with   the 
                                  following formula:

                                   

                                  PC[(i,t)] = {P1[(i,t)]  x E1[(i,t)]  + 
                                  P2[(i,t)] x E2[(i,t)]} x M[(i,t)]

                                   

                                  The   multiplier   (M[(i,t)]),    next 
                                  entitlement     (E2[(i,t)]),      near 
                                  entitlement (E1[(i,t)]), next contract
                                  price (P2[(i,t)])  and  near  contract 
                                  price (P1[(i,t)])  are  all  published 
                                  daily by the Issuer on its website  at 
                                  www.etfsecurities.com/osl.

                                   

                                  This    pricing    formula    reflects 
                                  applicable fees as well as the  prices 
                                  of  the  relevant  underlying  futures 
                                  contracts.

                                   

                                  Underlying futures contract prices

                                  The  Energy  Securities  being  issued 
                                  pursuant to the Final Terms are priced
                                  by reference to two underlying futures
                                  contracts of different maturities.

                                   

                                  The near  contract  price  (P1[(i,t)]) 
                                  and next  contract  price  (P2[(i,t)]) 
                                  are prices  for  the  first  year  and 
                                  second year,  second  year  and  third 
                                  year, and third  year and fourth  year 
                                  December month contracts respectively.

                                   

                                  Entitlement

                                  The near  entitlement (E1[(i,t)])  and 
                                  next entitlement  (E2[(i,t)]) are  the 
                                  weighting applied to the near contract
                                  price   and   next   contract    price 
                                  respectively.

                                                                          

                                  Over time  (because futures  contracts 
                                  expire) the pricing  formula needs  to 
                                  involve  a   change  from   the   near 
                                  contract  to  the  next  contract   (a 
                                  process known as  "rolling") and  this 
                                  is done on  specified days called  the 
                                  "roll period". During each roll period
                                  the  weights   roll  from   the   near 
                                  entitlement to the next entitlement in
                                  accordance with  formulae designed  to 
                                  reproduce the  effect of  selling  the 
                                  near   contract   and   applying   the 
                                  proceeds   in   acquiring   the   next 
                                  contract. In that process, if the near
                                  contract price is higher than the next
                                  contract price  then  the sum  of  the 
                                  near   entitlement   and   the    next 
                                  entitlement will increase, whereas  if 
                                  the  opposite   is  true   (the   near 
                                  contract price is lower than the  next 
                                  contract price)  then the  sum of  the 
                                  near   entitlement   and   the    next 
                                  entitlement will decrease.

                                   

                                  Multiplier

                                  The multiplier (M[(i,t)]) is  adjusted 
                                  on  each  business  day  in  the   Ice 
                                  Futures Oil Market  by the  equivalent 
                                  to an interest return net of all  fees 
                                  (the "Daily  Adjustment").  The  Daily 
                                  Adjustment  (which  may  be  negative) 
                                  will be  an annualised  rate equal  to 
                                  (i) a rate  agreed from  time to  time 
                                  between the  Issuer and  the  relevant 
                                  Oil  Major   Company  reflecting   the 
                                  benefit  or  cost  to  the  Oil  Major 
                                  Company of selling Energy Contracts to
                                  the    Issuer    (the    "the    Other 
                                  Adjustment");  less   (ii)  the   fees 
                                  payable by  the  Issuer to  ManJer  of 
                                  0.49 per cent per annum.

                                   

                                  The price of  an Energy Security  will 
                                  therefore  vary  with  prices  of  the 
                                  underlying-referenced future contracts
                                  but also depending  on the  proportion 
                                  of each futures contract reflected  in 
                                  the price  as contracts  are  "rolled" 
                                  and  to  take  account  of  applicable 
                                  fees.

                                   
C.16      Expiration/    Maturity Not applicable; the Energy  Securities 
          date                    are undated  securities  and  have  no 
                                  specified maturity date and no  expiry  
                                  date.

                                   
C.17      Settlement              CREST

                                  The Issuer is  a participating  issuer 
                                  in CREST, a  paperless system for  the 
                                  settlement of transfers and holding of
                                  securities.

                                   

                                  Settlement    of     creations     and 
                                  redemptions                             

                                  On  creation  or  redemption  of   the 
                                  Energy  Securities,  settlement   will 
                                  occur (provided certain conditions are
                                  met)  on   the  third   business   day 
                                  following  receipt  of  the   relevant 
                                  creation or  redemption request  on  a 
                                  delivery versus  payment basis  within 
                                  CREST. 

                                   
C.18      Description of return   The Price of each Energy Security is
                                  the same as the price of the
                                  underlying Energy Contract of the same
                                  class calculated in accordance with
                                  the formula set out and described in
                                  C.15 above.

                                  The return on each class of Energy
                                  Securities is the variation in the
                                  Price for the Energy Securities of
                                  that class which will vary with prices
                                  of the underlying-referenced future
                                  contracts but also depending on the
                                  proportion of each futures contract
                                  reflected in the price as contracts
                                  are "rolled" and to take account of     
                                  applicable fees, as described in C.15
                                  above.

                                  The Price of each class of Energy
                                  Security will be calculated by the
                                  Issuer as at the end of each pricing
                                  day (after the futures market prices
                                  for that day have been published) and
                                  posted on the Issuer's website at
                                  http://www.etfsecurities.com/osl.

                                  The  Energy  Securities  do  not  bear 
                                  interest.

                                   
C.19      Final price /  exercise Prices  for  each   class  of   Energy 
          price                   Contract  are   calculated   on   each 
                                  pricing day and redemptions of  Energy 
                                  Securities   and   the   corresponding 
                                  Energy Contracts will be at the  Price 
                                  on the  day  on which  the  redemption 
                                  request is received.

                                   

                                  Each  Energy   Contract   and   Energy 
                                  Security is priced by reference to two
                                  futures contracts, referred to as  the 
                                  near contract and the next  contract.  
                                  There   are   different   rules    for 
                                  determining the near contract and next
                                  contract  for  each  class  of  Energy  
                                  Security.  A multiplier  is then  used 
                                  to adjust  the price  to reflect  fees 
                                  paid   to   ManJer   and   any   other 
                                  adjustment agreed with  the Oil  Major 
                                  Company. The detailed  formula is  set 
                                  out in C.15 above.

                                   

                                  Each   Authorised   Participant    and 
                                  relevant Oil Major Company must notify
                                  any objection  to the  Issuer's  price 
                                  calculation  by  10.00  a.m.  on   the 
                                  business day following  that on  which 
                                  the Price was determined.

                                   
C.20      Type of underlying  and The Energy  Securities are  backed  by 
          where  information   on matching  Energy  Contracts  purchased 
          underlying can be found from an Oil Major Company.  As at  the 
                                  date  of   this   Prospectus,   Energy 
                                  Contracts are only  entered into  with 
                                  one Oil Major Company - Shell  Trading 
                                  Switzerland. 

                                   

                                  The  Energy   Contracts  backing   the  
                                  Energy   Securities    being    issued 
                                  pursuant to the Final Terms are priced
                                  by reference to oil futures contracts.
                                  The futures  market pricing  benchmark 
                                  used is West Texas Intermediate  crude 
                                  oil based on  the New York  Mercantile 
                                  Exchange's WTI Contracts.  Information
                                  on  these  futures  contracts  can  be 
                                  found on the  website of the  relevant 
                                  exchange (http://www.cmegroup.com).

 

SECTION D - Risks

 
D.2  Key risks of Issuer and The following are the key risk factors associated
     obligor                 with the Issuer and Oil Major Companies that
                             should be considered by prospective investors
                             before making the decision to invest, as they may
                             impact the Price that payable on Redemption:

                             There can be no assurance that an Oil Major
                             Company, Shell Trading Switzerland, Shell
                             Treasury or any other entity providing credit
                             support to an Oil Major Company will be able to
                             fulfil their payment obligations under the
                             relevant Energy Contracts, Energy Purchase
                             Agreement or other credit obligation, in which
                             case the Issuer will rank as an unsecured
                             creditor. Consequently, there can be no assurance
                             that the Issuer will be able to redeem Energy
                             Securities at their redemption Price or even at
                             all.

                              
D.6  Key risks of securities An investment  in  Energy Securities  involves  a 
                             significant degree of risk and investors may lose
                             the value of their  entire investment or part  of 
                             it.  The  following are  just  some of  the  risk 
                             factors that should be considered by  prospective 
                             investors before making the decision to invest:

                              

                             ·     The impact of the level of and movement  in 
                             futures  prices  on  the  price  of  the   Energy 
                             Securities including the effect of  backwardation 
                             or contango, will vary with each class of  Energy 
                             Security.  Generally,  Energy Securities  with  a 
                             shorter  maturity   have  greater   exposure   to 
                             movements in the price and also greater  exposure 
                             to backwardation or contango.   As a result,  the 
                             Brent  1mth  Oil  Securities  and  WTI  2mth  Oil 
                             Securities had the greatest volatility in  Price, 
                             near entitlement, next entitlement, near contract
                             price  and  next  contract  price.   For   Energy 
                             Securities with a higher maturity, the  frequency 
                             of backwardation increased and thus the frequency
                             of contango decreased.

                              

                             ·     Past performance  is not  an indication  of 
                             expected   performance    and   the    investment 
                             performance  of  an  Energy  Security  could   be 
                             volatile.

                              

                             ·     The  aggregate  Entitlement  of  an  Energy 
                             Security will  decline  during  roll  periods  in 
                             situations where  the  further out  the  delivery 
                             date of  an Energy  Contract is,  the higher  the 
                             price of that Energy Contract becomes.

                              

                             ·     Investors are  dependent on the  Authorised 
                             Participants making a market in Energy Securities
                             in  order  to  minimise  tracking  error  and  to 
                             provide investors  with  liquidity.   There  can, 
                             however, be no assurance  that there will at  all 
                             times be an Authorised  Participant to deal  with 
                             the  Issuer  in  creating  and  redeeming  Energy 
                             Securities.   If   the   Authorised   Participant 
                             Agreements are terminated for any reason, it  may 
                             be prejudicial  to the  ability of  investors  to 
                             sell Energy  Securities, or  to  sell them  at  a 
                             price close to the  relevant Price, or sell  them 
                             within a short time period.

                              

                             ·     The  main  credit support  for  the  Energy 
                             Contracts with Shell Trading Switzerland is  from 
                             Shell Treasury,  which company  does not  have  a 
                             credit rating and  is not a  company used by  the 
                             Shell Group to issue debt or other securities  in 
                             the financial markets.  Furthermore, that company
                             may be  substituted for  another credit  provider 
                             from within the Shell Group.  Consequently, there
                             can be no  assurance that Shell  Treasury or  any 
                             other entity  providing credit  support to  Shell 
                             Trading Switzerland will be able to fulfill their
                             payment obligations under the Letters of  Credit, 
                             in which case the  Issuer will have an  unsecured 
                             claim, nor can  there be any  assurance that  the 
                             Issuer will be able  to redeem Energy  Securities 
                             at their redemption Price or even at all.

                              

                             ·     There are certain circumstances in which an
                             early redemption  of  Energy  Securities  may  be 
                             imposed on  investors,  which may  result  in  an 
                             investment in  Energy Securities  being  redeemed 
                             earlier  than   desired.   Such   investors   may 
                             therefore find that  their Energy Securities  are 
                             redeemed at a Price lower than if they were  able 
                             to continue holding the Energy Securities.

                              

                             ·      Trading  in   oil  and  carbon   emissions 
                             allowances  takes   place  on   several   markets 
                             (including futures exchanges and over-the-counter
                             (OTC)) around  the  world and  trading  on  these 
                             markets may have an impact on the price of oil on
                             other markets.

                              

                             ·     The price  of crude  oil and  hence of  Oil 
                             Securities   may   fluctuate   widely.   As   Oil 
                             Securities are priced in  US Dollars their  value 
                             in other  currencies  will also  be  affected  by 
                             exchange rate movements.

                              

                             ·     The Forward  Oil Securities are  referenced 
                             off longer-dated oil  futures and will  generally 
                             be less liquid and  price changes could be  prone 
                             to volatility.

                              

                              
SECTION E - Offer

 
E.2b Offer   and   use    of Not applicable; the reasons for the offer and use
     proceeds                of proceeds are not different from making  profit 
                             and/or hedging.

                              
E.3  Terms and conditions of The Energy Securities are being made available by
     the offer               the Issuer  for subscription  only to  Authorised 
                             Participants   who   have   submitted   a   valid 
                             application and  will  only be  issued  once  the 
                             subscription price has been paid to the  relevant 
                             Oil Major  Company.   An  Authorised  Participant 
                             must also pay the Issuer a creation fee of £500. 
                             Any applications  for Energy  Securities made  by 
                             11.00 a.m.  London time  on a  business day  will 
                             generally enable the Authorised Participant to be
                             registered as  the  holder of  Energy  Securities 
                             within three business days.
                              
E.4  Material or conflicting Mr Tuckwell and Mr Ross (who are directors of the
     interests               Issuer) are also directors of ManJer and each  of 
                             the Directors of the Issuer are also directors of
                             HoldCo -  the sole  shareholder of  the  Issuer.  
                             While  these  roles  could  potentially  lead  to 
                             conflicts  of  interest,  the  Directors  do  not 
                             believe that there  are any  actual or  potential 
                             conflicts of  interest between  the duties  which 
                             the   directors    and/or    members    of    the 
                             administrative, management and supervisory bodies
                             of the Issuer owe to the Issuer, and the  private 
                             interests and/or other duties that they have.

                              

                             The   Directors   of   the   Issuer   also   hold 
                             directorships of other issuers of exchange traded
                             commodities also owned by HoldCo. 

                              
E.7  Expenses                The Issuer charges the following costs to
                             investors:

                              

                             -      £500 per creation or redemption carried
                             out directly with the Issuer; and

                             -     

                             -      a Management Fee of 0.49 per cent. per
                             annum based on the value of all Energy Securities
                             outstanding by way of application of the Daily
                             Adjustment.

                              

                             No other costs will be charged to investors by
                             the Issuer. 

                              

                             The Issuer estimates the expenses charged by an
                             authorised offeror in connection with the sale of
                             Energy Securities to an investor will be 0.15 per
                             cent. of the value of the Energy Securities sold
                             to such investor.

                              

 

                     This information is provided by RNS
           The company news service from the London Stock Exchange
 
END
 
 
MSCBBBMTMBIMBIT -0- Nov/01/2012 10:46 GMT
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