Consider the following statements 1 The depository receipts are the financial instruments which are ...........

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Consider the following statements:

1. The depository receipts are the financial instruments which are issuedby a company/entity in a foreign jurisdiction.

2. By issuing the Indian Depository receipts an Indian company gets listed in a foreign stock exchange.

Which of the statements given above are correct?

1 only

2 only

Both 1 and 2

Neither 1 nor 2

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Explanation:

1 only

The depository receipts are the financial instruments which are issued by a company/entity in a foreign jurisdiction. (Correct)

Depository Receipts (DRs) are financial instruments representing shares of a foreign company. These can be issued in foreign jurisdictions and traded on foreign stock exchanges.

By issuing the Indian Depository Receipts, an Indian company gets listed in a foreign stock exchange. (Incorrect)

By issuing Indian Depository Receipts (IDRs), an Indian company does not get listed on a foreign stock exchange. IDRs are listed and traded on the Indian stock exchanges, and they represent shares of the Indian company.

Therefore, the correct statement is 1 only.