ETF Agent Definition
Learn the definition of etf agent and other ETF terminology from the etf.com glossary.
Learn more about ETF Agents
An ETF Agent, often embodied by authorized participants, assumes a pivotal role in the creation and redemption process of ETF shares. These financial entities facilitate the efficient functioning of ETFs by engaging in the creation/redemption mechanism, ensuring the alignment of the ETF's market price with its Net Asset Value (NAV). Acting as intermediaries, ETF agents contribute to market liquidity and the seamless trading of ETF shares, enhancing the overall investor experience. Their involvement in the primary market activities supports the ETF's price discovery process and reinforces the vital link between the ETF and the underlying securities it represents.
Related Terms
Authorized Participant (AP), Creation and Redemption Mechanism, Net Asset Value (NAV), Liquidity
