European Depositary Receipt

A European Depositary Receipt (EDR) represents ownership in the shares of a non-European company that trades in European financial markets. It is a European equivalent of the original American depositary receipts (ADR). The EDR is issued by a bank in Europe representing stocks traded on an exchange outside of the bank’s home country.

The stock of some non-European companies trade on European stock exchanges like London Stock Exchange through the use of EDRs.[1] EDRs enable European investors to buy shares in foreign companies without the hazards or inconveniences of cross-border and cross-currency transactions. EDRs can be issued in any currency, but euro is the most common currency for this type of security.[2] If the EDR is issued in Euro's the EDRs carry prices in euro, pay dividends in Euro, and can be traded like the shares of European-based companies.

See also

References

  1. ↑ "BNY Mellon announces one billion depositary receipts for Vodafone". Reuters. 18 April 2013.
  2. ↑ "European Depositary Receipt definition". InvestorDictionary.com. Retrieved May 21, 2014.


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