European Depositary Receipt
A European Depositary Receipt ( EDR ) is a depository receipt for shares , which on euro states. It is similar to the American Depositary Receipt .
backgrounds
In order to make shares that are not admitted abroad tradable in these countries, investment banks issue certificates in these countries that represent the underlying share (the base value ) in a certain amount. In contrast to many other warrants, the rights to the dividends of the respective underlyings are also shown.
The shares of a company that is listed in Frankfurt, for example, can not simply be traded in Luxembourg without the corresponding approval including an English securities prospectus. Instead of properly admitting these shares in Luxembourg, a bank licensed to sell in Luxembourg can also issue certificates there that show the share price of the underlying asset - here the company listed in Frankfurt - 1 to 1 (including dividend entitlement). The issue of such a certificate is much easier than the admission of direct shares, which means that this route is often attractive (however, with increasing harmonization of European directives, it becomes less attractive).
See also
Individual evidence
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