DEFINITION of 'European Depository Receipt - EDR'

A negotiable security (receipt) that is issued by a European bank, and that represents securities which trade on exchanges outside of the bank's home country. Abbreviated as "EDRs", these securities are traded on local exchanges and used by banks - and issuing companies in the U.S. and other countries - to attract investment capital from the European region.

Also known as "Euro Depository Receipts", which may or may not imply that the euro is the currency the receipt is issued upon.

BREAKING DOWN 'European Depository Receipt - EDR'

While the euro isn't the only currency that can be used to issue and trade European Depository Receipts, it is the most common because of its widespread adoption in Europe. American Depository Receipts (ADRs) are the equivalent of this type of bank receipt in the U.S.

Investors in EDRs are entitled to the same dividends and capital gains as the investors who hold common shares in the same company.

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RELATED FAQS
  1. How does a depository bank benefit from issuing an ADR for a foreign company for ...

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  2. What are the differences between global depositary receipts (GDRs) and American depositary ...

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  3. Which of the following best describes American Depository Receipts (ADRs) ...

    The correct answer is b): ADRs are used to trade foreign securities in the United States. Instead of buying shares of foreign ... Read Answer >>
  4. Why would an investor want to hold an American Depository Receipt rather than the ...

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