Depository Receipt


Depository receipts (DR) represent ownership in a foreign firm, traded like ordinary shares in local market, in local market currencies. To create DRs, a bank deposits shares of a foreign firm, and then issues depository receipts representing ownership of a specific number of the foreign shares in the local market, which can be bought by local investors. The depository bank acts as a custodian and manages dividends, stock splits, and other events. The value of the depositary receipts is affected by the price of the underly foreign stocks, as well as the currency exchange rate.

DRs can be sponsored depository receipt, or unsponsored depository receipt.

See also: American Depository Receipt, Global Depository Receipt, Basket of Listed Depository Receipts

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