The Securities and Exchange Commission has approved JPMorgan Chase & Co's controversial plan to launch an exchange-traded fund physically backed by copper, it said on Monday.
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The ruling is a blow to consumers of the metal, which is used in plumbing and cooling systems. Since the fund will use physical copper cathode as collateral against shares of the fund, the consumers fear it will affect supplies and inflate prices. U.S. Senator Carl Levin, a Democrat from Michigan, also voiced his opposition to the plan.
In its filing dated Friday and posted on its website on Monday, the SEC said it did not believe the fund would affect the flow of copper for immediate delivery.
"The Commission does not believe that the listing and trading of the shares is likely to disrupt the supply of copper available for immediate delivery, which is what (the copper fabricators) predict would increase the price of copper," it said in its ruling.
JPM filed its first application to list the fund on NYSE Arca in October 2010.
(Reporting by Josephine Mason; Editing by Lisa Von Ahn)