Welcome to the Financial Times Lexicon

Browse thousands of words and phrases selected by Financial Times editors and suggest new terms for the glossary.


Term of the day

authorised participant

Authorised participants are essential to building exchange traded funds since they create and redeem the ETF shares, usually in exchange for baskets of the underlying securities, from the ETF sponsor.

APs typically sign on to support ETFs because they believe they can profit by “arbitraging” small differences between the price of the fund’s shares and the underlying securities being tracked.

"If the ETF price trades above the NAV [net asset value, or the value of the ETF’s securities], the APs buy...