Hanyang Securities said on the 9th that it will begin designated participant (AP) and liquidity provider (LP) operations for exchange-traded funds (ETFs).
ETF AP and LP operations supply liquidity for ETFs listed on the Korea Exchange (KRX) by providing creation and redemption and bid and ask quotes, helping stabilize ETF prices and improve investor transaction access.
Hanyang Securities signed a liquidity supply agreement with the Korea Exchange (KRX) in Nov., and has completed LP agreements with each asset manager for about 60 ETFs. It said it plans to add about 40 more listings and perform LP operations for a total of 110 ETFs.
In addition, based on collaboration with asset managers, it will also carry out AP operations. APs adjust market supply and demand through ETF creation and redemption and, together with LPs, are core components of the ETF infrastructure.
Lee Gyu-jin, head of the Multi-Solution Center at Hanyang Securities, said, "The start of ETF AP and LP operations is meaningful in that Hanyang Securities has expanded its business base into the market infrastructure space," and added, "By participating in the liquidity supply system that underpins the ETF market, we will expand our lineup centered on high-demand ETFs to strengthen product competitiveness and differentiate customer service."
Hanyang Securities believes that through ETF AP and LP operations, it can gradually secure the foundations needed to enter as a market maker (MM), including experience in supplying ETF liquidity, quote management capabilities, and the build-out of a trading system.