International Depository Receipt

Summary of International Depository Receipt

A document issued by a bank or other trustee evidencing that it holds on behalf of a named party a given number of shares of stock in a foreign firm. The IDR is issued in lieu of actual share certificates for various reasons: to circumvent Securities and Exchange Commission requirements concerning registration of stock issues (because many foreign issues are in bearer form, whereas IDRs can be registered) or to facilitate local purchase and sale of shares. In the United States the term American depository receipt applies; similarly, European depository receipt is the applicable term in Western Europe.

(Main Author: William J. Miller)