Depositary Receipt

A depositary receipt is a negotiable financial instrument issued by a bank to represent a foreign company's publicly traded securities. The depositary receipt trades on a local stock exchange. DR listed and traded in the US economy are known as American Depository Receipts.

Depositary receipts make it easier to buy shares in foreign companies because the shares of the company don't have to leave the home state.

When the depositary bank is in the U.S., the instruments are known as American Depositary Receipts (ADRs). European banks issue European depositary receipts, and other banks issue global depositary receipts (GDRs).

Read more about Depositary Receipt:  How It Works, Types

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