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Depository Bank Shares Account

Global depository receipts (GDRs) represent ownership of shares of foreign companies that are deposited with a bank and allow international trading of those shares. GDRs are issued by major international banks and trade independently of the underlying shares on stock exchanges in Europe and London, facilitating investment in companies from emerging markets. While prices of GDRs typically track the underlying shares, they are traded and settled separately.

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70 views1 page

Depository Bank Shares Account

Global depository receipts (GDRs) represent ownership of shares of foreign companies that are deposited with a bank and allow international trading of those shares. GDRs are issued by major international banks and trade independently of the underlying shares on stock exchanges in Europe and London, facilitating investment in companies from emerging markets. While prices of GDRs typically track the underlying shares, they are traded and settled separately.

Uploaded by

sachin_chawla
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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A global depository receipt or global depositary receipt (GDR) is a certificate issued by a depository bank, which purchases shares of foreign

companies and deposits it on the account. GDRs represent ownership of an underlying number of shares. Global depository receipts facilitate trade of shares, and are commonly used to invest in companies from developing or emerging markets. Prices of global depositary receipt are often close to values of related shares, but they are traded and settled independently of the underlying share. Several international banks issue GDRs, such as JPMorgan Chase, Citigroup, Deutsche Bank, The Bank of New York Mellon. GDRs are often listed in the Frankfurt Stock Exchange, Luxembourg Stock Exchange and in the London Stock Exchange, where they are traded on the International Order Book (IOB). Normally 1 GDR = 10 Shares,but not always. It is a negotiable instrument which is denominated in some freely convertible currency. It is a negotiable certificate denominated in US dollars which represents a non-US Company's publicly traded local equity. characteristics of GDRs: 1.it is an unsecured security 2.a fixed rate of interest is paid on it 3.it may be converted into number of shares 4.interest and redemption price is public in foreign agency 5.it is listed and traded in the share market Global Depository Receipt is not a very different financial instrument, from that of ADR. In fact if the Indian Company which has issued GDRs in the American market wishes to further extend it to other developed and advanced countries such as Europe, then they can sell these ADRs to the public of Europe and the same would be named as GDR

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