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 euros, it pays dividends in euros and can be traded like the shares of European companies.