DEFINITION of European Depositary Receipt
European Depositary Receipt is a negotiable security issued by a bank of one country representing stocks traded on an exchange outside of the bank’s home country. EDRs can be issued in any currency, but euro is the most common currency for this type of securities.
American Depositary Receipts are the equivalents of EDRs in the U.S. Foreign depositary receipts make it easier for individuals to invest in companies outside of their countries and are used to attract investment capital from other regions. Investors receive the same dividends and capital gains as the investors who own common stock in the same corporation.