What is a GDR certificate?

It is a certificate that represents shares in a foreign company and trades on two or more global stock exchanges. GDRs typically trade on American stock exchanges as well as Eurozone or Asian exchanges. GDRs and their dividends are priced in the local currency of the exchanges where the GDRs are traded.

What are GDRs & how do they work?

Issuing GDRs entails following some strict regulations, contravening which the company may face serious repercussions. Dividends generated from GDRs are paid in a local country’s currency, subject to the forex market turbulences. Mostly, High Net-Worth Individuals are benefitted from GDRs as they are costly.

What is a unitary GDR program?

When the GDRs are offered simultaneously in Reg. S and Rule 144A form, but not in separate and distinct tranches, they exist inside what is known as a unitary GDR program. GDRs can also be offered in Reg. S form only.

Can a GDR be offered in Reg s form?

GDRs can also be offered in Reg. S form only. Due to the general flexibility afforded by GDRs, issuers from a variety of regions, including Europe, the Middle East and Africa; Asia Pacific; and Latin America, have been utilizing GDR programs to help meet their capital-raising needs on an increasing basis.