Creation of ETF Securities and Issue of New Shares GLOBAL PREMIER EXCHANGE

Creation of ETF Securities

Creation Unit (CU)

In creation of ETFs or issue of new shares, a so called 'Creation Unit (CU)' is applied. The CU is a minimum volume required for creation and the issue of new shares, set by a collective investment company. The reason why the CU is needed is related to the purpose of ETFs of following indexes. First, it considers the minimum fund size required to form a portfolio of the index an ETF intends to follow, and second, it aims to seek the reliability of the management of an ETF by restricting excessively frequent creation, new stock issue and redemption by maintaining the unit over a certain size.

Creation Procedure