Global Depositary Receipts: investing in emerging markets

Mike Fox and Michael Thompson, Steptoe & Johnson

Global Depositary Receipts (GDRs) are transferable securities issued by depositary banks which represent ownership of a given number of a foreign company’s shares which can be listed and traded independently from the underlying shares. GDRs have risen to prominence in recent years as being the favoured instrument by which companies from emerging markets such as Russia, India and China choose to raise capital on western stock exchanges.