What is a Depositary Receipt?

What is a Depositary Receipt?

Keith Mullin

35 years: Capital markets editorial

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.

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.

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What is a Depositary Receipt?

7 mins 6 secs

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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