Liquidity Provider(LP)
Liquidity Provider (LP) should maintain spread during trading hours. The spread should be within 1 % for ETFs tracking domestic underlying asset and within 3 % for ETFs tracking overseas underlying asset and bid and ask orders should be submitted of more than 100 shares. If the spread surpasses specified spread, LP should offer quote within 5 minutes. Since LP system exists, even though trading is not active, investor can easily buy and sell ETF in market. As of Nov. 2011, total 16 companies work as LP. Total trading volume of LP until 2009 was within 3 % of total trading volume. However, as an LP evaluation system was introduced and competitions among LPs got fiercer, LP trading volume increased to the level of 16%.