WisdomTree Multi Asset Issuer Public Limited Company said holders of eight commodity products will meet again Dec. 3 to consider proposed risk-control changes after Oct. 22 sessions fell short of quorum. The meetings are set for 4 a.m. ET (9 a.m. Dublin time, converted from the issuer’s announced local time). The issuer said October voting instructions will not remain valid and results are expected shortly after the reconvened meetings.
The products are WisdomTree Copper 3x Daily Leveraged Securities and WisdomTree Copper 3x Daily Short Securities; WisdomTree Gold 3x Daily Leveraged Securities and WisdomTree Gold 3x Daily Short Securities; WisdomTree Natural Gas 3x Daily Leveraged Securities; WisdomTree Silver 3x Daily Leveraged Securities and WisdomTree Silver 3x Daily Short Securities; and WisdomTree Palladium 2x Daily Leveraged Securities.
One proposal would add a price-reset calculation outside Standard Trading Hours. The calculation would stop at the first of two limits: three hours after a trigger or 15 minutes after Standard Trading Hours open. The issuer cited particularly high volatility in commodity contract prices this year. It says the changes are intended to benefit holders, the issuer and the Swap Provider by reducing the risk of compulsory redemption.
For the seven copper, gold, natural gas and silver products, the Severe Disruption Event Threshold and Severe Overnight Gap Event Threshold would each rise from 20% to 30%. For Palladium 2x Daily Leveraged Securities, both would increase from 30% to 40%. The circular says a Severe Intraday Market Disruption Event or Severe Overnight Gap Event can lead the Swap Provider, after notice to the issuer, to postpone the relevant Valuation Date or terminate the relevant Swap Transaction. If a terminated transaction cannot be replaced, the affected securities may be compulsorily redeemed.
A separate proposal would allow a product to move to an index with a substantially similar strategy, potentially tracking the same underlying asset through futures contracts for different months. The circular names no replacement index and provides for at least five Currency Business Days’ notice to holders. Its summary says a change requires consent from the Swap Calculation Agent and Swap Provider; its detailed letter gives the issuer discretion to select a successor index without Trustee consent, without explaining how those provisions fit together.
The circular says existing intraday restrikes can cause tracking deviations and that swap execution costs or profits may affect product prices. It does not quantify the cost or tracking effects of the proposed overnight feature.
Each class must approve the changes through a separate Extraordinary Resolution, requiring at least 75% of votes cast. At an initial meeting, two or more holders or agents present in person must hold or represent more than half of the class’s outstanding securities. At an adjourned meeting, two or more holders or agents present in person form a quorum regardless of how many securities they hold or represent.
