Safekeeping Certificate

DEFINITION of 'Safekeeping Certificate'

A document that represents ownership of a security or certificate of deposit. Safekeeping certificates are the investor's claim against the institution that is holding his or her financial instruments. These documents are most commonly used to facilitate international securities trading and foreign investment; they benefit both the companies and investors who use them.

BREAKING DOWN 'Safekeeping Certificate'

Depositary receipts are a common example of safekeeping certificates. These documents often represent ownership of securities issued and traded outside the United States. Depositary receipts can be bought and sold like stocks and can help investors diversify their holdings.

Other methods for investing internationally include purchasing U.S.-traded international stocks, purchasing stock in U.S.-based multinational corporations, and investing in international index funds and foreign country mutual funds through U.S. brokerages. When assets are placed with a broker, a safekeeping certificate is issued.

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RELATED FAQS
  1. Is there a difference between ADR and ADS?

    American depositary receipts (ADRs) allow foreign equities to be traded on U.S. stock exchanges; in fact, this is how the ... Read Full Answer >>
  2. Do mutual funds have CUSIP numbers?

    The Committee on Uniform Securities Identification Procedures (CUSIP) number is a standardized identification system used ... Read Full Answer >>
  3. 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 >>
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  5. What are the differences between global depositary receipts (GDRs) and American depositary ...

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