Boost, Source sign up additional Authorised Participants

Mar 5th, 2013 | By | Category: ETF and Index News

Highlighting the important role played by Authorised Participants (APs) in ensuring the liquidity of exchange-traded products (ETPs), London-based ETP providers Boost and Source have both recently added new APs to their ETP platforms.

Boost ETP, Source sign up additional Authorised Participants

London-based ETP providers Boost and Source have both recently signed up additional Authorised Participants (APs).

Boost, which specialises in leveraged and short ETPs, has signed up Flow Traders, ABN Amro and UBS to act as APs for its London Stock Exchange-listed range, in addition to BNP Paribas and Virtu Financial.

The additional APs should add significantly to the depth of liquidity available on Boost’s ETP platform, which also encompasses more than 15 market makers.

Hector McNeil, Co-CEO of Boost, said: “We are very happy to welcome Flow Traders, ABN AMRO and UBS to the platform. At Boost we are very committed to providing highly innovative and liquid ETPs, and each new AP will add significantly to this.”

Meanwhile, in a similar bid to enhance liquidity, Source has also signed up UBS to act as an additional AP for one of its flagship ETFs.

UBS has been added as an AP for the Man GLG Europe Plus Source ETF (MPFE), which is listed on the SIX Swiss Exchange, London Stock Exchange and Deutsche Börse. The Switzerland-based bank will work alongside Bank of America Merrill Lynch, Goldman Sachs, JP Morgan, Morgan Stanley and Nomura, who are the existing APs to the $885 million fund.

Peter Thompson, Chief Strategy Officer at Source, said: “The addition of UBS as a partner re-affirms Source’s commitment to the Swiss ETP market in particular. Amid growing investor demand, we look forward to working closely with UBS to deliver the MPFE product with increased efficiency, leveraging UBS’s considerable local presence and trading capability”.

APs undertake the responsibility of creating and redeeming units in an ETP (ETF or ETC) in the primary market. With physically replicated ETFs, APs create ETF shares – known as creation units – by assembling the underlying securities of the ETF in their appropriate weightings to reach creation unit size and then delivering those securities to the fund in-kind. In return, the AP receives ETF shares which are then introduced to the secondary market where they are traded between buyers and sellers through the exchange. APs also have the ability to redeem ETF shares through the same process in reverse.

With swap-based ETPs, such as those sponsored by Source and Boost, this process typically works by creating or redeeming shares via a cash or in-kind basis using securities acceptable to the sponsor rather than the actual underlying.

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