Depositary Receipt

Depositary receipt is a certificate which may be registered in the holder's name but is more usually in the form of a bearer security, giving the holder ownership of a specified number of shares in a company which have been deposited with a financial institution, usually one of the major banks.

This is usually the way non-U.S. shares are traded in New York, where they are known as American Depositary Receipts (ADRs), since it allows a company to have access to U.S. investors without the expense of actually listing its shares on one of the U.S. exchanges.

See Also: Online share dealing service Stockmarket Centre

Last Updated: June 2007 © Moneyextra.com

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