Global depository receipt
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A global depository receipt (GDR and sometimes spelled depositary) is a general name for a
Prices of global depositary receipt are based on the values of related shares, but they are traded and settled independently of the underlying share. Typically, 1 GDR is equal to 10 underlying shares, but any ratio can be used. It is a negotiable instrument which is denominated in some freely convertible currency.[1] GDRs enable a company, the issuer, to access investors in capital markets outside of its home country.
Several international banks issue GDRs, such as
Characteristics
- It is an unsecured security
- It may be converted into number of shares
- Interest and redemption price is public in foreign agency
- It is listed and traded on the stock exchange
- Holders of a GDR do not carry any voting rights
Usage
If for example an Indian company which has issued ADRs in the American market wishes to further extend it to other developed and advanced countries such as in Europe, then they can sell these ADRs to the public of Europe and the same would be named as GDR. GDR can be issued in more than one country and can be denominated in any freely convertible currency.
See also
- Depositary receipt
- American Depositary Receipt
- European depositary receipt
- Luxembourg Depositary Receipt
- Indian Depository Receipt
- Cross listing
References
- ^ "Global Depository Receipt (GDR)". MBA Skool. Retrieved 9 June 2014.
External links
- Deutsche Bank's depositary receipt website
- Global depository receipts
- BNY Mellon ADRs
- Frankfurt Stock Exchange