easy · Market Microstructure
What is the primary function of an 'Authorized Participant' (AP) in the microstructure of Exchange-Traded Funds (ETFs)?
- To manage the legal and regulatory filings of the ETF sponsor.
- To perform arbitrage that keeps the ETF's market price aligned with its Net Asset Value (NAV).
- To provide research reports on the underlying companies in the index.
- To guarantee that every retail order receives price improvement.
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