International Finance - International Equity Financing

what is international cross-listing

stock of a company listed on different stock markets and not just in its home country

what is Depositary Receipt (DR)

It represents a number of original shares held in custody by a financial institution in the country of the stock exchange

what is American Depositary Receipts (ADR)

The original shares are held in custody by a US depositary bank (like Bank of New York Mellon), which converts all dividends and other payments into USD and charges a small custodial fee.

what are Global Registered Shares

Ordinary share of a company that trades and transfers freely across national borders

what are Global Depositary Receipts

Like ADRs but they can trade across many markets and settle in the currency of each market

what are the advantages of cross-listing

• reduction in cost of capital

  • increased liquidity

  • Wider shareholder base

  • increase Market integration

  • Corporate governance signal →improves investor protection and disclosure requirements

• access to capital

what are the disadvantages of cross-listing

• listing costs

• Accounting requirements/disclosure