Systems and methods for securitizing a commodity

Abstract

A method for creating trust shares in a physical commodity, the trust shares being tradable over an electronic communications network, includes receiving a creation order comprising a request to create the trust shares, confirming delivery into a trust account of an amount of physical commodity associated with the trust shares being requested, and releasing the requested trust shares based upon the amount of physical commodity delivered into the account. A method for redeeming trust shares associated with a physical commodity, the trust shares being tradable over an electronic communications network, includes receiving a redemption order comprising a request to redeem an amount of trust shares associated with an amount of the physical commodity held in a trust account, receiving the amount of the trust shares, and releasing from the trust account the amount of the physical commodity associated with the amount of the trust shares received.

What is claimed is: 
     
         1 . A method for creating trust shares in a commodity, the trust shares being tradable over an electronic communications network, the method comprising:
 confirming delivery into a trust account of an amount of commodity associated with a quantity of trust shares; and   releasing the trust shares based upon the amount of commodity delivered into the account.   
     
     
         2 . The method of  claim 1 , wherein a value of the shares released is approximately equal to a value of the commodity delivered into the account. 
     
     
         3 . The method of  claim 1 , wherein a value of the shares released is based on a net asset value of the commodity. 
     
     
         4 . The method of  claim 1 , wherein the commodity comprises a precious metal. 
     
     
         5 . The method of  claim 1 , wherein the commodity comprises a base metal. 
     
     
         6 . The method of  claim 1 , wherein a value of the amount of commodity delivered into the trust account is not less than a minimum value. 
     
     
         7 . A method for redeeming trust shares associated with a commodity, the trust shares being tradable over an electronic communications network, the method comprising:
 receiving an amount of the trust shares associated with an amount of the commodity held in a trust account; and   releasing from the trust account the amount of the commodity associated with the amount of the trust shares received.   
     
     
         8 . The method of  claim 7 , wherein the releasing from the trust account the amount of the commodity comprises sending release instructions to a custodian of the trust account. 
     
     
         9 . The method of  claim 7 , wherein a value of the amount of the commodity released is approximately equal to a value of the trust shares received. 
     
     
         10 . The method of  claim 7 , wherein the commodity comprises a precious metal. 
     
     
         11 . The method of  claim 7 , wherein the commodity comprises a base metal. 
     
     
         12 . The method of  claim 7 , wherein the amount of trust shares received is a minimum amount of shares or a multiple of the minimum amount of the shares. 
     
     
         13 . A commodity trust trading system, comprising:
 an electronic communications network (ECN) configured to trade trust shares of a commodity trust, wherein said commodity trust holds an amount of a commodity represented by a number of shares corresponding to said amount of the commodity;   wherein one or more custodians maintain custody of a portion of said amount of the commodity and manage said custody via an interface with the ECN.   
     
     
         14 . The system of  claim 13 , wherein the commodity comprises a precious metal. 
     
     
         15 . The system of  claim 13 , wherein the commodity comprises a base metal. 
     
     
         16 . The system of  claim 13 , wherein the trust shares are Exchange Traded Fund (ETF) shares. 
     
     
         17 . The system of  claim 13 , wherein the ECN comprises an interface to a securities exchange. 
     
     
         18 . The system of  claim 17 , wherein the securities exchange is the New York Stock Exchange. 
     
     
         19 . The system of  claim 13 , wherein said amount of the commodity comprises a number of receipts, each corresponding to an amount of unallocated commodity.