Meaning & use
depository shares
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Meanings
nounpluralfinancebusiness
Financial instruments issued by a bank that represent ownership of shares in a foreign company, allowing investors to trade those shares on a local exchange.
Grammar: Always used in the plural; the singular 'depository share' refers to one such instrument.
Patterns
- depository shares of a company
- issue depository shares
- buy depository shares
The bank issued depository shares to let American investors buy stock in the Japanese company.
Depository shares often trade on major exchanges like the New York Stock Exchange.
She invested in depository shares of a European technology firm.
nounpluralfinancebusiness
A type of security representing a specific number of underlying foreign shares, created and held by a depositary bank.
Grammar: Often used with 'American' or 'global' to specify the type, e.g., 'American depository shares'.
Patterns
- American depository shares (ADRs)
- global depository shares (GDRs)
- depository shares representing shares
American depository shares are listed on US exchanges but represent foreign stock.
The company created global depository shares to raise capital from international investors.
Depository shares can be cancelled and exchanged for the underlying foreign shares.
Word forms
| singular | depository share |
|---|
Common combinations
- American depository shares
- American depository shares allow US investors to buy foreign companies easily.
- global depository shares
- Global depository shares are often used to raise money in multiple markets.
- issue depository shares
- The bank decided to issue depository shares to expand its investor base.
- trade depository shares
- You can trade depository shares just like regular stocks on the exchange.
Synonyms and how they differ
- ADR
- Short for American Depositary Receipt, a specific type of depository share used in the US; 'depository shares' is the broader term.
- GDR
- Short for Global Depositary Receipt, used for international offerings; similar but often traded outside the US.
Word family
- depositary noun
- The bank or institution that holds the underlying shares and issues the depository shares.
- deposit verb
- To place money or assets in a bank; related to the idea of holding something safely.
Commonly confused: depository shares or depository? depository shares or depositary receipt?
depository shares vs depository
A 'depository' is a place where things are stored, like a warehouse; 'depositary' is the financial institution that issues depository shares. The spelling difference matters in finance.
depository shares vs depositary receipt
A depositary receipt is the physical document proving ownership of depository shares; the shares themselves are the underlying assets.
Practice
Which sentence uses 'depository shares' correctly?
Choose one answer.
Depository shares are financial instruments that represent foreign shares, so buying them to invest in a foreign company is correct. Option A confuses them with a bank deposit; option C treats them as physical objects; option D is unrelated to payment.
Make it your own
Write a sentence using “depository shares”, then check it and compare it with the examples above.