This module is part of the 2027 curriculum. You are following the 2026 curriculum, where it is not taught in this form. Switch if you are sitting the exam under the 2027 curriculum.
Lesson 3 of 6 · 14 min
Investing in foreign equity: direct, depository receipts, GRS and BLDRs
You can buy foreign shares directly in their home market, or buy a local-currency proxy for them: a depository receipt, a global registered share or a basket of DRs.
In short
- Market integration lets companies raise capital abroad and lets investors diversify with assets that have lower correlation with home assets.
- Countries restrict foreign ownership to limit foreign control, give domestic investors a stake in foreign firms operating locally, and dampen volatile capital flows.
- Direct investing: trade in the foreign market and currency, with its rules; often less transparency and more volatility.
- A depository receipt (DR) trades locally and represents shares deposited with a bank. Sponsored DRs involve the company and give holders voting rights; with unsponsored DRs the depository bank keeps the votes.
- GDRs trade outside both the home country and the US; ADRs are USD securities traded in the US (Levels I, II, III and Rule 144A).
- A global registered share (GRS) is the same share traded in different currencies on several exchanges; a BLDR is an ETF holding a portfolio of DRs.
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