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Quantitative Finance · Glossary

What is Authorised participant, creation unit, creation basket?

Also known as: authorised participant · creation unit · creation basket

Definition 14.2 Markets I: The Ecosystem and Exchange-Traded Markets · Chapter 14 — Exchange-Traded Funds

An authorised participant (AP) is a broker-dealer that has contracted with an ETF for the right to create and redeem its shares. It does so in creation units, blocks of a fixed number of ETF shares, by delivering to the fund (or receiving from it) the creation basket: the list of securities and cash, published daily by the fund, that one creation unit is exchanged for.

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