What is the depository?

The depository is a trading security that is purchased and sold on the stock exchange. The income usually represents one or more foreign shares issued by international companies in their home country. The depository confirmation allows investors to purchase interest in foreign companies without passing through the international stock exchange. The two most common types of these incomes are American and global depositories. The first stores on American stock exchanges, while the second usually trades in the London Stock Exchange and other international places. For example, the company must transfer shares to a mediation house in its home country. Upon receipt of mediation, he uses depositories connected to the International Stock Exchange for the sale of deposit income. This connection ensures that shares actually exist and non -manipulation occurs between a foreign company and an international brokerage house.

American deposit confirmation allows investors to appreciate foreign stocks in US dollars. This helps them to determine their returnOst investment through increase in prices and dividends from international companies. For companies to use them properly, US financial institutions must be used with these incomes with overseas connections. The advantage of this income is that it eventually reduces the costs associated with the ownership of these shares. This allows investors to avoid fees for each individual transaction when purchasing foreign shares.

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Global Depository works in a similar way, although the International Bank holds information for shares of a foreign company. This confirmation also allows investors to appreciate their shares or dividends in US dollars or foreign currency, depending on the company's location and/or the international bank that holds the confirmation. If investors want these revenue at euro prices, this document is a European deposit confirmation.

Investors can sell these revenue back abroad SPOLine, which is a process called Cross Trading. As a result, the American broker sells revenue back to a foreign country. From there, a foreign intermediary house can sell shares of shares back to the company and transfer money to an American bank or other investors as needed. This process also allows individuals originally from abroad the ability to buy and sell shares in their home country through the International Exchange.