Global Registered Share (GRS)
Candlefocus EditorGlobal Registered Shares (GRS) are securities issued by a company in the United States and registered for trading in other markets throughout the world. In contrast to American Depositary Receipts (ADRs) which are issued by a bank and represent ownership of foreign securities, GRS are issued directly by the issuing company.
Benefits of Global Registered Shares
GRS offer increased portfolio flexibility and liquidity, as the security can be traded seamlessly in multiple markets and currencies. This portability of ownership also offers investors worldwide access to the corporate’s shares and allows them to take advantage of the global trends in pricing and liquidity. Additionally, because GRS are issued by the actual issuing company, they offer strong investor protection and investor participation in any corporate actions required by the company.
Drawbacks of Global Registered Shares
Despite the potential benefits of global registered shares, there are some difficult regulatory hurdles to obtaining them. Due to the necessity of obtaining in multiple markets, the process of setting up GRS can be long and arduous. However, this complexity may result in a more reliable and secure offering for investors. Furthermore, the associated costs of setting up the security may be a deterrent for smaller companies which may not have the financial resources to progress.
Conclusion
Global registered shares can be an attractive investment opportunity for experienced investors with international portfolios due to the portability of ownership and increased liquidity. However, the long and difficult regulatory process may be daunting for some companies, particularly those with less financial resources available.