The Securities and Exchange Commission (SEC) has blocked a proposal by the NASDAQ OMX Group to list shares in companies that stockpile commodities, The Wall Street Journal reports. The SEC argued that shares in such stockpile companies may be prone to manipulation by those with advance access to market-moving information on a company’s preferred commodity.
Nasdaq OMX proposed that listed stockpilers be required to spend 85% of any IPO proceeds on buying actual commodities as well as providing regular updates to investors as to the market value of materials held. The SEC found that NASDAQ OMX’s proposal of a minimum twice-weekly commodity pricing update may not be enough to provide a fair representation of a stockpiler’s market value.
Click here for the story from The Wall Street Journal.