{"id":2858,"date":"2025-12-31T09:47:05","date_gmt":"2025-12-31T09:47:05","guid":{"rendered":"https:\/\/globaleasyforex.com\/blog\/?p=2858"},"modified":"2026-02-05T11:23:30","modified_gmt":"2026-02-05T11:23:30","slug":"what-are-depositary-receipts-drs","status":"publish","type":"post","link":"https:\/\/globaleasyforex.com\/blog\/what-are-depositary-receipts-drs\/","title":{"rendered":"What Are Depositary Receipts (DRs)?"},"content":{"rendered":"\n

Depositary Receipts (DRs)<\/strong> are financial instruments that allow investors to own shares in a foreign company without directly buying stock<\/a> on that company’s home exchange. They are negotiable certificates issued by a bank (the depositary) representing ownership of a specific number of shares in a foreign corporation. These shares are held in custody by the bank in the company’s home country, while the DRs trade on an exchange or over-the-counter market in another country\u2014most commonly in the United States.<\/p>\n\n\n\n

DRs make international investing more accessible by overcoming barriers like foreign settlement systems, currency conversion, and regulatory differences. The two main types are American Depositary Receipts (ADRs)<\/strong> and Global Depositary Receipts (GDRs)<\/strong>.<\/p>\n\n\n\n

This article is not financial advice or any prediction of asset prices. The gathered information may not be all accurate and subject to change at any time.<\/p>\n\n\n\n

How Depositary Receipts Work<\/h3>\n\n\n\n
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  1. A foreign company wishing to reach international investors deposits its shares with a depositary bank in its home country (or a custodian bank acting on behalf of the depositary).<\/li>\n\n\n\n
  2. The depositary bank issues DR certificates in the target market (e.g., U.S. or Europe), each representing a fixed number of underlying shares (the “ratio” \u2014 e.g., 1 DR = 1 share, or 1 DR = 10 shares).<\/li>\n\n\n\n
  3. Investors buy and sell these DRs on local exchanges (e.g., NYSE<\/a>, NASDAQ, London Stock Exchange) in the local currency (USD, GBP, etc.).<\/li>\n\n\n\n
  4. Dividends, if paid, are converted to the DR currency and distributed (net of fees and taxes).<\/li>\n\n\n\n
  5. Holders can convert DRs back into original shares if desired (though this is rare for retail investors).<\/li>\n<\/ol>\n\n\n\n

    The depositary bank handles corporate actions (voting rights pass-through where possible, stock splits, rights offerings) and currency conversion.<\/p>\n\n\n\n

    Types of Depositary Receipts<\/h3>\n\n\n\n

    American Depositary Receipts (ADRs)<\/h4>\n\n\n\n