Important Points for IC 99 - Asset Management Exam
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FCCB is an equity linked foreign currency debt security subscribed by non-residents which can be converted into equity shares. If the conversion option is not exercised, the redemption of such bonds must be made in dollars.
Depository Receipt (DR) is a negotiable instrument evidencing a fixed number of equity shares of the issuing company being an indian company; denominated in foreign currency and is being traded in foreign exchanges.
American Depository Receipt (ADR) is a dollar denominated form of equity ownership in the form of depository receipts in a non-US company. It represents the foreign shares of the company held on deposit by a custodian bank in the companys home country and carries the corporate and economic rights of the foreign shares.
GDRs have access usually to Euro market and US market. The US portion of GDRs to be listed on US exchanges to comply with SEC requirements and the European portion are to be complied with EU directive.
Section 2(44) of Companies Act, 2013 has defined "Global Depository Receipt" as any instrument in the form of a depository receipt, by whatever name called, created by a foreign depository outside India and authorised by a company making an issue of depository receipts.
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