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authorized participant - 1 dictionary result
Authorized Participant
An entity chosen by an exchange-traded fund's sponsor to undertake the responsibility of obtaining the underlying assets needed to create an ETF. Authorized participants are typically large institutional organizations, such as market makers or specialists.
Investopedia Commentary
The authorized participant plays a critical role in the construction of an ETF's creation units (large blocks of the ETF's underlying shares of equity or other assets).
Related Links
Introduction To Exchange-Traded Funds
An Inside Look At ETF Construction
See also: Creation Unit, Exchange-Traded Fund, Intraday, Redemption, Sponsor, Trust
Also spelled: authorized participants
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