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European Depositary Receipts (EDRs)

European Depositary Receipts (EDRs) are financial instruments that represent shares of a non-European company traded on European stock exchanges. EDRs enable investors in Europe to invest in foreign companies without dealing with the complexities of cross-border trading and currency conversion. Each EDR corresponds to a specific number of shares of the underlying foreign company, and they are issued by banks that hold the original shares in custody.

Example

A European investor can buy EDRs of a U.S. technology company, gaining exposure to its stock without trading directly on a U.S. exchange.

Key points

• Represent shares of non-European companies traded on European stock exchanges.

• Issued by banks that hold the underlying shares in custody.

• Allow European investors to invest in foreign companies easily.

Quick Answers to Curious Questions

EDRs are financial instruments that represent shares of non-European companies traded on European exchanges.

EDRs allow European investors to invest in foreign companies without dealing with cross-border trading and currency issues.

EDRs are issued by banks that hold the underlying shares of the foreign company in custody.

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