It's been an interesting summer for the U.S. Natural Gas Fund. IndexUniverse's Murray Coleman reports that, after the recent back-and-forth with the SEC and investors, the fuel and natural gas focused ETF will re-open, albeit with restrictions, to new investors on September 28.

United States Commodities Funds, which runs UNG, sought SEC approval most recently in June to issue new units. However, on August 12th, when the SEC gave permission to create one billion new units, UNG management politely declined, citing possible new limits set by the Commodities and Futures Trading Commission on trading and positions in the energy markets as the main concern.

However, the US Natural Gas Fund manager has reversed its stance yet again. On Friday, the asset manager filed the proper paperwork to re-open the fuel fund and sell the allotted billion units. UNG’s management stated in the filing that they "believe that UNG will have the ability, under limited circumstances, to offer Creation Baskets and meet its investment objective."

This time the re-opening will come with strict conditions for institutions and other big investors interested in purchasing creation units through swap agreements and other contracts. The restrictions include: reserving the right to limit the issuance of "creation baskets" to an authorized purchaser; varying the terms and conditions of the investments to be delivered or arranged by an authorized purchaser in order to purchase a creation basket; and possibly deciding to offer creation baskets only on particular days.

The ETF's management has also announced that if new regulatory circumstances arise before the end of September, they may decide not to open the fund at all.

Bloomberg's Asjylyn Loder reports that Bradley Kay, an ETF analyst with Morningstar, feels troubled by UNGs actions.

“By moving into swaps, they are side-stepping the spirit of regulation while adding credit risk and extra costs for investors," Kay told Bloomberg. "It’s effectively a loss for everyone but the fund manager.”

According to Bloomberg, USCF chief investment officerJohn Hyland countered with a statement that UNG “at all times endeavors to remain in compliance with all currently applicable rules and regulations mandated by the CFTC and the appropriate commodity exchanges.” 

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