Answer Posted / bloody idiot
GDR (Global Depository Receipt)
/ADR (American Depository Receipt)
GDR/ADR are the depository receipts - Certificate issued by
Banks (in case of ADR Federal Reserve)
GDR is exclusively issued in European market / sans US
Markets.
In US exclusively ADR is issued.
Now for the concept, When a Co. wants to trade its
shares/equity on Foreign Exchange it can do so my issuing
ADR/GDR which are issued by Central Bank.
e.g. If a Indian Co. wants to get itself listed on NYSE,
then a broker in US via its subsidiary/hand in India
purchases the shares from Indian Market and deposits the
same with Indian Depository Bank. The depository Bank in
turn communicates to US Federal Reserve that the shares are
deposited and upon this the Federal Reserve issues ADR
which gets listed and are tradable just as any other
security on NYSE. Every ADR/GDR must shown the no. of
shares represented by it and also its rate in $ (ADR) /
pounds (GDR).
The only diff. between ADR and GDR is that ADR is
exclusively traded in American Markets and GDR can be
traded Globally.
I hope this explained the situation in a simplified manner.
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