Global buy-side crossing network Liquidnet has started offering its members trading in global depository receipts (GDRs) listed on the Luxembourg Stock Exchange.
Liquidnet will initially offer 97 Luxembourg-listed GDRs. All of these are issued under Regulation-S – a US regulation governing US firms’ ability to issue shares overseas – traded in US dollars, and settled by European central securities depository Euroclear. Liquidnet already trades London Stock Exchange (LSE)-listed Regulation-S GDRs, securities listed on AIM, the LSE’s growth market, exchange-traded funds, contracts for difference and equities from 30 global markets.
“Since our inception, Liquidnet’s main objective has been to bring the buy-side as much liquidity as possible, whilst providing the most secure and efficient environment in which to trade,” said John Barker, managing director of Liquidnet Europe, in a statement. “The addition of Luxembourg GDR trading is yet another example of our commitment to be the global institutional marketplace.”
GDRs are certificates backed by the shares of a company, but traded away from the company’s domestic exchange. They effectively allow companies’ shares to be traded in countries where they do not have a stock market listing, and in turn allow investors to invest in companies not listed on their local stock markets. They are often used to invest in emerging market companies.