Bank of Montreal warns against other banks in gold business

6:50p ET Monday, June 6, 2016

Dear Friend of GATA and Gold:

A year ago February, Bank of Montreal announced plans to start a physical gold fund --

>http://www.sec.gov/Archives/edgar/data/927971/000121465916012033/d63160s...

The prospectus provides a few interesting and even amusing details:

-- It cautions that the "official sector" is active in the gold market and can affect prices, an acknowledgment that will never make it into any reports by mainstream financial news organizations.

-- The fund will not insure its assets, trusting the Royal Canadian Mint to protect them.

-- The fund is structured separate from the Bank of Montreal so that its assets will not be vulnerable to claims by creditors against the bank.

-- And -- the amusing part -- the fund seeks to eliminate "derivatives risk (i.e., the use of unallocated gold, gold certificates, exchange-traded products, derivatives, financial instruments, or any product that represents encumbered gold)," as well as "'empty vault risk' or gold bullion lending risk (i.e., the practice of the gold custodian lending, pledging, hypothecating, re-hypothecating, or otherwise encumbering any of the investors' underlying gold bullion)."

Imagine -- a bank warning against the shady practices in the gold market of other banks. While that's something else that will never make the mainstream financial news organizations, at least the word is getting around anyway.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

http://www.gata.org/node/16498