ETF market making requires appointed liquidity providers, direct unit creation and redemption, and exchange-level operational rules. Regulation 68 requires a Fund Management Entity to appoint a market maker to ensure ETF trading liquidity through two-way quotes. Market makers may create ... Summary
ETF market making requires appointed liquidity providers, direct unit creation and redemption, and exchange-level operational rules.
Regulation 68 requires a Fund Management Entity to appoint a market maker to ensure ETF trading liquidity through two-way quotes. Market makers may create units and seek redemptions directly from the Fund Management Entity. Recognised stock exchanges may simplify authorisation for registered intermediaries and must frame rules on spreads, minimum quantities, incentives, margining and net settlement.
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