In the U.S., ETFs are “open-ended” funds — meaning their units (shares) can be created or redeemed daily by large institutions called Authorized Participants (APs).
The process runs through clearing agencies like DTCC / NSCC and involves three main stages of reporting/files:
1️⃣ Preliminary (Prelim) file — initial provisional trade information
2️⃣ Cash Burst file — confirmation of cash and in-kind movements
3️⃣ Final ETF file — confirmed, reconciled, and NAV-applied data
Let’s break these down clearly 👇
🧾 1️⃣ PRELIM FILE (Preliminary File)
🔹 Meaning:
The Prelim file is a provisional report sent by the ETF issuer or the clearing agent (like DTCC) to confirm that an Authorized Participant (AP) has submitted an order to create or redeem ETF shares.
At this stage:
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The NAV (Net Asset Value) is not yet finalized.
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The number of units and cash amount are estimated.
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The trade is still subject to validation.
🔹 Typical Use:
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Allows ETF issuers, custodians, and fund accountants to see what creations/redemptions were placed that day.
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Used for same-day reconciliation and liquidity tracking.
🔹 Example (SPY ETF):
| Field | Example | Explanation |
|---|---|---|
| Trade Date | 06-Nov-2025 | The trading day |
| ETF Ticker | SPY | S&P 500 ETF |
| Authorized Participant | Goldman Sachs | Who placed the order |
| Transaction Type | CREATION | Request to create new ETF units |
| Side | BUY | The AP is buying new ETF shares |
| Estimated NAV | $520.00 | Provisional NAV (not final yet) |
| Estimated Units | 100,000 | Number of ETF units requested |
| Estimated Trade Value | $52,000,000 | Approximate total trade value |
| Status | PRELIM | Still pending confirmation |
At this point, Goldman Sachs is delivering a basket of S&P 500 stocks worth about $52 million to SPDR, and expects to receive 100,000 new SPY ETF shares in return.
💵 2️⃣ CASH BURST FILE
🔹 Meaning:
The Cash Burst file is generated once actual settlement of the equity and/or cash leg begins.
In ETF creation/redemption, the AP delivers a basket of securities (in-kind) and sometimes a cash component to balance small price differences.
This file confirms the cash flows associated with that transaction.
🔹 Typical Use:
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Indicates that the ETF fund has received (or will pay) the cash portion.
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Used by custodians and accountants to book the cash leg in their systems.
🔹 Example (continuing SPY example):
| Field | Example | Explanation |
|---|---|---|
| Trade Date | 06-Nov-2025 | Same day as prelim |
| ETF Ticker | SPY | |
| Authorized Participant | Goldman Sachs | |
| Transaction Type | CREATION | Creation of ETF shares |
| Side | BUY | ETF shares being created |
| Equity Basket Value | $51,950,000 | Stocks delivered by AP |
| Cash Adjustment | $50,000 | Cash component to balance value |
| Total Settlement Value | $52,000,000 | Total value delivered |
| Status | CASH BURST | Cash leg confirmed |
👉 In simple terms:
This file “bursts” the cash details into the system — showing actual money flow, though unit allotment isn’t finalized yet.
📄 3️⃣ FINAL ETF FILE
🔹 Meaning:
The Final ETF file is the official, reconciled, and audited record of all ETF creation and redemption transactions for a given trade date.
It’s generated after NAV is calculated (usually end of day or T+1) and after DTCC confirms settlement.
This file is what fund accountants, auditors, and regulators rely on.
🔹 Typical Use:
-
Used for final accounting and regulatory reporting.
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Confirms the exact number of units created/redeemed and the final NAV used.
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Forms the basis for custodian entries and investor statements.
🔹 Example (continuing SPY example):
| Field | Example | Explanation |
|---|---|---|
| Trade Date | 06-Nov-2025 | |
| Settlement Date | 07-Nov-2025 | T+1 settlement |
| ETF Ticker | SPY | |
| Authorized Participant | Goldman Sachs | |
| Transaction Type | CREATION | |
| Side | BUY | AP received ETF shares |
| Final NAV | $519.87 | Actual NAV determined post-market |
| Final Units | 100,000 | Confirmed units created |
| Final Value | $51,987,000 | NAV × Units |
| Status | FINAL | Fully confirmed |
At this stage, everything is finalized — ETF shares have been issued, cash/equities settled, and records closed.
🔄 SIDE & TRANSACTION TYPE (Explained Clearly)
| Field | Common Values | Meaning |
|---|---|---|
| Side | BUY / SELL | “BUY” = ETF creation (AP receives ETF units) “SELL” = ETF redemption (AP returns ETF units) |
| Transaction Type | CREATION / REDEMPTION / SECONDARY TRADE | “CREATION” = New ETF shares issued “REDEMPTION” = ETF shares returned to issuer “SECONDARY TRADE” = Normal stock exchange trade (not primary market) |
| Settlement Type | IN-KIND / CASH | “IN-KIND” = ETF units exchanged for a basket of stocks “CASH” = ETF units exchanged for money |
| Status | PRELIM / CASH BURST / FINAL | Indicates the processing stage of the transaction |
🧩 Summary Table
| File Name | Stage | Purpose | Key Content | Confirmation Level |
|---|---|---|---|---|
| Prelim File | Trade Day (T) | Initial record of ETF creation/redemption | Estimated units, estimated NAV, AP info | Tentative |
| Cash Burst File | Trade Day Evening (T) | Cash settlement confirmation | Cash inflows/outflows, equity basket values | Partial confirmation |
| Final ETF File | Next Day (T+1) | Official confirmed record | Final NAV, final units, total trade value | Fully confirmed & audited |
📘 In short:
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Prelim File = "We think this trade will happen for about this much."
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Cash Burst File = "The cash part of that trade is now confirmed."
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