SPDR ETF Trading Ecosystem Knowledge Hub

Structure of Capital Markets

In this section we provide information on the ETF Capital Markets structure, including the key players in the trading ecosystem, the creation and redemption process and how our Capital Markets Team develops and maintains market quality across our official exchange listings.


Key Players in the Trading Ecosystem

Gain an understanding of the roles and responsibilities of the capital markets players involved in the ETF ecosystem, including authorised participants, market makers, lead market makers, broker-dealers, different types of trading desks, exchanges, venues and clearing agents.


Creation and Redemption Process

ETFs benefit from a unique process called creation and redemption. In essence:

  •  Creation involves the buying of all the underlying securities and wrapping them into the exchange traded fund structure
  •  Redemption is the process whereby the ETF is "unwrapped" back into the individual securities

This process sets ETFs apart from other investment vehicles and is the mechanism that underpins many of their benefits, from improved tax efficiency to enhanced liquidity. But there is a lot more to it.

Read How ETFs are Created and Redeemed
 


Exchanges