What are Global depositary receipts ?

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  1. Nikil Mohan

    Nikil Mohan Member

    Sir, will you kindly explain what is Global depositary receipts (GDR) and how different it is from American depositary receipts (ADR) ?

    Thanks in advance in anticipation of your answer.
     
  2. Chandrashekar M

    Chandrashekar M Active Member

    Depositary receipts(DRs) are certificates that represent an ownership interest in the ordinary shares of stock of a company, but that are marketed outside of the company’s home country to increase its visibility in the world market and to access a greater amount of investment capital in other countries. Depositary receipts are structured to resemble typical stocks on the exchanges that they trade so that foreigners can buy an interest in the company without worrying about differences in currency, accounting practices, or language barriers, or be concerned about the other risks in investing in foreign stock directly.

    American depositary receipts(ADRs) were the 1stdepositary receipts issued—JP Morgan issued the 1stADR in 1927. ADRs allowed companies domiciled outside of the United States to tap the United States capital markets. ADRs were structured to resemble other stocks on the American exchanges with comparable prices per share, shareholder notifications in English, and the use of United States currency for the sale and purchase of ADRs and for dividend payments.
     
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