European Depositary Receipt

A European Depositary Receipt (EDR) represents ownership in the shares of a non-European company that trades in European financial markets. It is a European equivalent of the original American depositary receipts (ADR). The EDR is issued by a bank in Europe representing stocks traded on an exchange outside of the bank’s home country.

The stock of some non-European companies trade on European stock exchanges like London Stock Exchange through the use of EDRs.^[1] EDRs enable European investors to buy shares in foreign companies without the hazards or inconveniences of cross-border and cross-currency transactions. EDRs can be issued in any currency, but euro is the most common currency for this type of security.^[2] If the EDR is issued in Euro's the EDRs carry prices in euro, pay dividends in Euro, and can be traded like the shares of European-based companies.

See also

• Depositary receipt
• American depositary receipt
• Global Depositary Receipt
• Cross listing

References