A depositary receipt (DR) is a bank-issued negotiable certificate that represents shares in a foreign firm that are traded on a local stock exchange. The depositary receipt allows investors to hold shares in other nations’ equities and provides an option to trade on an international market.
A depositary receipt, which used to be a tangible certificate, permits investors to hold shares in other nations’ stock. The American depositary receipt (ADR) is one of the most prevalent forms of DRs, and it has been providing corporations, investors, and traders with worldwide investment options since the 1920s.