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.

1 . A method for creating trust shares in a physical commodity, the trust shares being
 tradable over an electronic communications network, the method comprising:   providing the electronic communications network configured to trade trust shares;   weighing an amount of physical commodity to be delivered into a trust account;   assaying the amount of physical commodity to be delivered into the trust account,   confirming delivery into the trust account the weighed and assayed amount of the physical commodity,   wherein a value of the amount of the physical commodity delivered   into the trust account is greater than a predetermined minimum value of the amount of the physical commodity; and   releasing trust shares, via the electronic communications network, based upon the   weighed and assayed amount of physical commodity delivered into the trust account, wherein a value of the shares released is   based on a net asset value of the weighed and assayed physical commodity and is approximately equal to a value of the physical commodity delivered into the account.   
     
     
         2 . The method of  claim 1 , wherein the physical commodity comprises a precious metal. 
     
     
         3 . The method of  claim 1 , wherein the physical commodity comprises a base metal. 
     
     
         4 . A method for redeeming trust shares associated with a physical commodity, the trust
 shares being tradable over an electronic communications network, the method comprising:   providing the electronic communications network configured to trade trust shares;   receiving, via the electronic communications network, an amount of the trust shares   associated with an amount of the physical commodity held in a trust account, wherein the amount of   trust shares received is greater than a predetermined minimum amount of trust shares or a multiple   of the predetermined minimum 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, wherein a value of the shares released is based on a weighing and assaying of the physical commodity to determine a net asset   value of the physical commodity and is approximately equal to a value of the commodity delivered into the account.   
     
     
         5 . The method of  claim 4 , wherein the releasing from the trust account the amount of the physical commodity comprises sending release instructions to a custodian of the trust account. 
     
     
         6 . The method of  claim 4 , wherein the physical commodity comprises a precious metal. 
     
     
         7 . The method of  claim 4 , wherein the physical commodity comprises a base metal. 
     
     
         8 . 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 physical commodity   represented by a number of shares corresponding to said amount of the physical commodity,   wherein a value of the amount of the physical commodity represented by the number of shares is   greater than a predetermined minimum value of the physical commodity; wherein a value of the shares is based on a weighing and assaying of the physical commodity to determine a net asset   value of the physical commodity and is approximately equal to a value of the commodity to be delivered into a trust account;   wherein one or more custodians maintain custody of a portion of said amount of the physical commodity and manage said custody via an interface with the ECN.   
     
     
         9 . The system of  claim 8 , wherein the physical commodity comprises a precious metal. 
     
     
         10 . The system of  claim 8 , wherein the physical commodity comprises a base metal. 
     
     
         11 . The system of  claim 8 , wherein the trust shares are Exchange Traded Fund (ETF) shares. 
     
     
         12 . The system of  claim 8 , wherein the ECN comprises an interface to a securities exchange. 
     
     
         13 . The system of  claim 12 , wherein the securities exchange is the New York Stock Exchange. 
     
     
         14 . The system of  claim 8 , wherein said amount of the physical commodity comprises a number of receipts, each corresponding to an amount of unallocated physical commodity.