Consider the following statements:1.Indian Depository receipts enable foreign companies to raise funds from the Indian securities Markets.2.American Depository receipts lists shares of a foreign country in the U.S. markets.Which of the statements given above is/are correct?

Q. Consider the following statements:
1.Indian Depository receipts enable foreign companies to raise funds from the Indian securities Markets.
2.American Depository receipts lists shares of a foreign country in the U.S. markets.
Which of the statements given above is/are correct?

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: C

Notes:

A foreign company can access Indian securities market for raising funds through issue of Indian Depository Receipts (IDRs). An IDR is an instrument denominated in Indian Rupees in the form of a depository receipt created by a Domestic Depository (custodian of securities registered with the Securities and Exchange Board of India) against the underlying equity of issuing company to enable foreign companies to raise funds from the Indian securities Markets.

American Depository Receipt (ADR) is a depository receipt which is issued by a US depository bank against a certain number of shares owned by a non-US based company.

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Q. Consider the following statements: 1.Indian Depository receipts enable foreign companies to raise funds from the Indian securities Markets.2.American Depository receipts lists shares of a foreign country in the U.S. markets.Which of the statements given above is/are correct?

Post-Mains Strategy Session by Mr. Ayush Sinha | ForumIAS

Q. Consider the following statements:
1.Indian Depository receipts enable foreign companies to raise funds from the Indian securities Markets.
2.American Depository receipts lists shares of a foreign country in the U.S. markets.
Which of the statements given above is/are correct?