Each share of the ETF would be equivalent to 10 ounces of silver, according to the Securities and Exchange Commission (SEC) filing by Barclays, MarketWatch news reported.
According to MarketWatch, the silver held by the ETF would be valued on the basis of that day’s announced London Fix, the price per ounce set by three marketmaking members of the London Bullion Market Association at approximately noon, London time, each day. On Friday, the London Fix for silver was $7.37 an ounce.
Bank of New York will serve as trustee for the silver ETF and the London branch of J.P. Morgan Chase Bank, will be the custodian, according to the Barclays filing.
The sponsor’s fee is 0.5% of the adjusted net asset value of the trust, according to the filing. The trust may sell some of its silver to cover expenses, meaning the amount of silver per share may vary over time, according to the report.
The introduction of StreetTracks Gold Trust, the first gold ETF, in November was one of the most successful mutual-fund launches of 2004, as the ETF gathered about $550 million in its first day of trading, according to MarketWatch.
Similar to investing in gold ETFs, silver is classified as a “collectible” by the Internal Revenue Service (IRS). If held for more than one year, gains are taxed at a 28% rate, compared with the 15% rate applicable to most other long-term capital gains, according to the news report.