Who are the Authorized Participants in the ETF?

[Kelvin]

 

[Brandon]

Hello Kelvin,
Authorized Participants (APS) in the Exchange Traded funds world play a crucial role. They ensure that the prices stated for the funds are equitable.
APS is essentially responsible for the creation/redemption technique in the ETF market. The creation/ redemption mechanism touches on how funds get exposure to the ETF market. This mechanism ensures that ETFs are more affordable and tax-efficient than other mutual funds.
APS, therefore, plays a crucial role in liquidity since they are the ones who provide liquidity and therefore have the might to modify the ETFs shares available in the market.
APS categorically are institutions. APS is, however, not like money makes even though both play a crucial role in market liquidity.
They trade the underlying asset. They directly impact the underlying liquidity since their central role is to ensure that the value of the funds is fair.
To achieve this, they spot a shortage or an excess in the market and act accordingly.