What is a Depositary Receipt?

What is a Depositary Receipt?

As an alternative to issuing shares on offshore exchanges, companies can undertake equity issuance in international markets in the form of  a depositary receipt (DR). Keith explains the benefits of DRs, what they are, and how they work.
Overview

Companies can have their shares traded, and raise capital in offshore markets by listing or issuing equity in international markets in the form of depository receipts. The market for depository receipts is huge. In 2018, 156.5 billion DRs were traded, valued at $4.2 trillion.

Key learning objectives:

  • Define Depositary Receipt

  • Discuss the various properties, benefits and negatives of issuing DRs

  • Explain the different types of ADRs, and the difference between sponsored and unsponsored DRs

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Summary
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Expert
Keith Mullin

Keith Mullin

Keith is the founder and director of KM Capital Markets, a media and thought-leadership consultancy. He spent the past 35 years working in specialist capital markets media and has had a ring-side seat at all of the major market events. Prior to setting up KM Capital Markets in 2017, Keith worked at Thomson Reuters.

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