Deutsche Bank cited a ā??regulatory eventā? to explain why it will redeem $425m in its PowerShares DB Crude Oil Double Long exchange traded notes, namely that the product pushed against the limits on crude oil holdings on the New York Mercantile Exchange.
But the exchange and the US commodities regulator did not acknowledge any event with regard to the fund leaving market participants to guess whether the storyline was more complicated. The reasons behind the notesā?? demise are of broader significance as commodity traders anxiously await the prospect of new federal caps on investment funds and Wall Street groupsā?? presence in the oil market. The Commodity Futures Trading Commission is eyeing these and other measures to combat what it calls ā??excessive speculationā?.
Deutsche Bank hedged risks from the double-long product by buying oil futures on Nymex and said it was scrapping the product because of ā??limitations imposedā? by the exchange.
