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An authorized participant is a person who has been granted permission to engage in a particular activity or process. It is a term used in various contexts, including:
Generally, the term “authorized participant” refers to a person who has been specifically granted permission to participate in a particular activity or process. The specific definition and requirements for authorization will vary depending on the context.
What is the difference between authorized participants and market makers?
Authorized participants create or redeem ETF shares, while market makers provide liquidity by buying and selling securities.
What is the difference between an authorized participant and an ETF sponsor?
The ETF sponsor manages the fund, while the authorized participant creates or redeems ETF shares with the sponsor.
Who are called market makers?
Market makers are firms or individuals that buy and sell securities to ensure smooth trading and liquidity.
Does an authorized participant need to be a broker-dealer?
Yes, most authorized participants are broker-dealers or large financial institutions.
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