UK firms are keen to attract capital from the biggest market in the world: America. But buying UK shares causes headaches. One is British stamp duty and another is owning shares in sterling. Enter the American Depository Receipt. Here a bank – usually a US one – buys shares in the UK firm and then issues depository receipts (ADRs) to investors. These are listed in the US, trade in dollars and don’t attract stamp duty. The principle can be extended. Global Depository Receipts (GDRs) allow any overseas investor to access markets (again the securities are created by investment banks) that would otherwise be closed. In parts of Asia, for example, governments often restrict outside ownership of shares.
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