Difference between GDR & ADR

The important difference between ADR and GDR are indicated in the following points: ADR is an abbreviation for American Depository Receipt whereas GDR is an acronym for Global Depository Receipt. ADR is a depository receipt issued by a US depository bank, against a certain number of shares of non-US company stock, trading in the US stock exchange. GDR is a negotiable instrument issued by the international depository bank, representing foreign company’s stock that is offered for sale in the international market. With the help of ADR, foreign companies can trade in US stock market, through various bank branches. On the other hand, GDR helps foreign companies to trade in any country’s stock market other than the US stock market, through ODB’s branches. ADR is issued in America while GDR is issued in Europe. ADR is listed in American Stock Exchange i.e. New York Stock Exchange (NYSE) or National Association of Securities Dealers Automated Quotations (NASDAQ). Conversely, GDR is listed in non-US stock exchanges like London Stock Exchange or Luxembourg Stock Exchange. ADR can be negotiated in America only while GDR can be negotiated in all around the world. When it comes to disclosure requirements for ADR’s, stipulated by the Securities Exchange Commission (SEC) are onerous. Unlike GDR’s whose disclosure requirements are less onerous. Talking about the market, ADR market is a retail investor market, where the investor’s participation is large and provides a proper valuation of a company’s stock. As opposed to the GDR, where the market is an institutional one, with less liquidity.