Investing in Non-domestic Equity Securities

• The investor must be familiar with the trading rules and regulations in the foreign market.

• The investor may not be able to conduct thorough analysis of securities if the foreign country's reporting requirements are less stringent.

Depository Receipts

Deposit receipts make investing in a company beyond the investor's home borders easy and convenient. A depositary receipt is a negotiable certificate that represents ownership in a foreign firm.

A bank, known as depositary, deposits the shares of a foreign company, and issues shares receipts representing those shares. These receipts are called depositary receipts.