A financial institution that has an agreement with an ETF allowing it to create and redeem the ETF's shares directly with the fund in large blocks.
From this site’s articles: "Authorized Participants can transact directly with the ETF sponsor to create or redeem shares when imbalances arise."
Quoted passages come from the articles on this site.
Covered in: Why ETF Liquidity ≠ AUM · How ETFs Actually Trade (book)
Related terms
Go deeper: books by Will Lee, CFA
For traders, PMs, and ETF specialists: a practitioner's deep dive into APs, market makers, NAV vs. iNAV, and trading under stress.
Get the ETF Liquidity Cheat Sheet
Subscribe to receive a free two-page ETF Liquidity Cheat Sheet, plus an occasional email when a new explainer is published.
No spam. Unsubscribe anytime.
Disclaimer
This material is provided for informational and educational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any security.
All views expressed are the author’s own and do not represent the views of any employer or affiliated organization.