Backed by Eligible Collateral provided by the Counterparty equal to 100% of previous day’s reported exposure. The Eligible Collateral is adjusted daily and held in an account in the Counterparty’s name with The Bank of New York Mellon.
In the event that the Counterparty defaults on its obligations, ETFS Commodity Securities Ltd (or the Trustee acting on behalf of investors) will have the right to take control over the Eligible Collateral in such account. In such circumstances, ETFS Commodity Securities Ltd (or the Trustee acting on behalf of the investors) would be expected to aim to realise the collateral in order to seek to make payment to investors. However there can be no guarantee that the cash received from realising collateral will be sufficient to pay the full amount due to investors.