International Depository Receipt - IDR


DEFINITION of 'International Depository Receipt - IDR'

A negotiable certificate issued by a bank representing ownership of stock of a foreign company held by the bank in trust. The International Depository Receipt (IDR) is known as the American Depository Receipt (ADR) in the United States; ADRs represents stocks of quality issuers from a number of developed and emerging markets. In Europe, IDRs are known as Global Depository Receipts, and trade on the London, Luxembourg and Frankfurt exchanges.

BREAKING DOWN 'International Depository Receipt - IDR'

The biggest advantage of IDRs is that a foreign company does not have to comply with all the issuing requirements of the country where it will be traded, making it easier - and cheaper - for the company to trade in the overseas jurisdiction than if it were to seek a full-fledged listing.

IDRs generally represent fractional ownership of the underlying stock, with each IDR representing one, two, three or even 10 shares. The price of the IDR usually trades close to the value of the underlying shares on a currency-conversion basis, but occasional divergences may give rise to arbitrage opportunities.

  1. Depositary Receipt

    A negotiable financial instrument issued by a bank to represent ...
  2. Safekeeping Certificate

    A document that represents ownership of a security or certificate ...
  3. American Depositary Receipt - ADR

    A negotiable certificate issued by a U.S. bank representing a ...
  4. Global Depositary Receipt - GDR

    1. A bank certificate issued in more than one country for shares ...
  5. American Depositary Share - ADS

    A U.S. dollar-denominated equity share of a foreign-based company ...
  6. Forex - FX

    The market in which currencies are traded. The forex market is ...
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  1. How are American Depository Receipts (ADRs) priced?

    The price of an American depositary receipt (ADR) is determined by the bank or other financial institution that issues it. ... Read Full Answer >>
  2. How are American Depository Receipts (ADRs) exchanged?

    American depositary receipts (ADRs) are bought and sold on regular U.S. stock exchanges, either in the over-the-counter market ... Read Full Answer >>
  3. What are the differences between global depositary receipts (GDRs) and American depositary ...

    A global depositary receipt (GDR) is a bank certificate issued in multiple countries for shares in a foreign company. The ... Read Full Answer >>
  4. What is the difference between a greenfield investment and a regular investment?

    A greenfield investment is a particular type of investment where an international company begins a new operation in a foreign ... Read Full Answer >>
  5. What are the benefits for a company investing in a greenfield investment?

    Advantages of greenfield investments include increased control, the ability to form marketing partnerships and the avoidance ... Read Full Answer >>
  6. Why did China designated certain territories as special administrative regions?

    The primary reason for the People's Republic of China designating two territories as special administrative regions, or SARs, ... Read Full Answer >>

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