There are two concepts in ETFs; creation(redemption) and trading. The primary market is responsible for creation and redemption, and the secondary market is where the ETFs are traded.

The primary market is a place where creation or redemption of ETFs is made. It is usually requested by institutional investors, and a securities firm designated as the Authorized Participant(AP) takes the role of the point of contact (POC).

Anyone can participate in the secondary market regardless of the investor's characteristics, and all general stock trading methods are allowed. There must be a 'Liqudity Provider(LP)' to create market.

In creation and redemption of ETFs, there is a special component called 'Creation Unit(CU: unit of creation and redemption).' An institutional investor who wants to create an ETF should pay the in-kind basket of stocks (in the case of Equity ETFs) corresponding to the CU to the collective investment company. When it redeems the ETF, it receives the in-kind basket of stocks corresponding to the CU instead of cash.