CFA Level I · CFA Level I Exam · Equity Instrument Features
Compared with a sponsored depository receipt, an unsponsored depository receipt most likely:
An unsponsored depository receipt is issued by a depository bank without the participation of the foreign company. The company has no formal agreement with the depository, so shareholder rights such as voting are usually less well defined than in a sponsored program.
- Agives the issuer a contract with the depository bank covering voting rights.
- Bis issued by a depository bank without the foreign company's participation.Correct
- Cis required to be listed on a major exchange.
Explanation
Unsponsored DRs are created by a depository bank in response to market demand, without the issuer's involvement, and the issuer has no formal agreement with the depository. Voting rights are typically addressed in sponsored programs, and unsponsored DRs generally trade over the counter.
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