Professional Documents
Culture Documents
Subject: Derivatives
Presented By:
Sanket Advilkar (01)
Amey Bhagat (05)
Amit Mittal (19)
Jerin John (52)
Rupali Indap (108)
Depository Receipts
It is a type of negotiable (transferable) financial security
It is a Physical Certificate
Corporate Issuer
Domestic Depository
Process of Issuing DR
Company Issues Ordinary Shares
Level I
Unsponsored
Types of
Level II
ADRs
Sponsored
Level III
Private
Placement
Unsponsored ADRs
Created in response of investors, brokers - dealers and
depository
Exempted from reporting requirements of the SEC
Not Listed on any exchange
Advantages: Disadvantages:
Inexpensive No control over the
Expands investors base activity
Minimal SEC compliance Conversion becomes
and reporting requirements costly
Sponsored ADRs
Initiated by Issuer
SEC reporting is
Minimal SEC registration Full SEC registration &
more detailed than
& reporting requirements. reporting requirements.
Level II.
Biggest Asian GDR was issued by SBI in 1997 for US $ 350 million
Process of GDR
GDR Listing
London Stock Exchange
Luxembourg Stock Exchange
Dubai International Financial Exchange (DIFX)
Singapore Exchange
Hong Kong Exchange
GDR: Advantages & Disadvantages
Allow investors to invest in foreign companies without worrying about
foreign trading practices & laws
GDRs are liquid because they are based on demand and supply which
is regulated by creating or cancelling shares
Provides the Issuer more larger and diverse shareholder base and the
ability to raise more capital in international markets
Shares
Initial issue price was Rs. 104 but it was listed at Rs 106,
exceeded expectations by Rs 2 on the NSE