Authorized Participant
An authorized participant is a person who has been granted permission to engage in a particular activity or process. It is a term used in various contexts, including:
1. Clinical Trials:
- In clinical trials, an authorized participant is a person who meets the eligibility criteria and has consented to participate in the study. They may be a patient, healthy volunteer, or control subject.
2. Financial Transactions:
- In some financial transactions, authorized participants include shareholders, creditors, and other authorized individuals who have the authority to act on behalf of a company or organization.
3. Computer Systems:
- In computer systems, authorized participants are users who have been granted permission to access a particular system or data. This includes employees, administrators, and authorized users.
4. Voting Systems:
- In voting systems, authorized participants are eligible voters who have the right to vote in a particular election.
5. Legal Proceedings:
- In legal proceedings, authorized participants include parties to the case, their attorneys, and other authorized individuals who have a vested interest in the case.
Generally, the term “authorized participant” refers to a person who has been specifically granted permission to participate in a particular activity or process. The specific definition and requirements for authorization will vary depending on the context.
FAQs
What is the difference between authorized participants and market makers?
Authorized participants create or redeem ETF shares, while market makers provide liquidity by buying and selling securities.
What is the difference between an authorized participant and an ETF sponsor?
The ETF sponsor manages the fund, while the authorized participant creates or redeems ETF shares with the sponsor.
Who are called market makers?
Market makers are firms or individuals that buy and sell securities to ensure smooth trading and liquidity.
Does an authorized participant need to be a broker-dealer?
Yes, most authorized participants are broker-dealers or large financial institutions.
