Differentiate between ADR AND GDR.

Banking & FinanceManagementCompanies/Organisations

The major differences between American Depository Receipt (ADR) and Global Depository Receipt (GDR) are as follows −

American Depository Receipt (ADR)

  • Main purpose is to acquire resources in USA.

  • Main objective is to attract investments from foreign companies.

  • Issued by US domestic capital market.

  • Foreign companies can trade in US markets.

  • US dollar as currency.

  • Listed in The New York Stock Exchange (NYSE) or NASDAQ.

  • Retail investor market.

  • Negotiation done in US only.

  • Legally complicated.

  • Onerous disclosure of terms.

Global Depository Receipt (GDR)

  • Main purpose is to acquire resources in different parts of the world.

  • Main objective is to invest in different parts of the world.

  • Issued by European capital market.

  • Foreign companies can trade anywhere other than US.

  • Euro as currency.

  • Listed in Non US exchange (London stock, etc.)

  • Institutional market.

  • Can negotiate anywhere.

  • Less onerous disclosure of terms.

  • Legally less complicated than ADR.

raja
Published on 24-Jul-2020 07:26:11
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