A global registered share (GRS, or Global Share) is a security in the United States. GRS is in the form of multiple markets around the world and trades in multiple currencies, according to Investopedia.
With GRSs, identical shares may trade on different stock exchanges. In addition, there are various currencies across country borders without convert into local currencies.
All holders of GRSs, just ike any other shareholder, have equal rights. For instance, voting, percentage of dividends, and so forth, in the issuing corporation (issuer).
Breaking Down Global Registered Share (GRS)
Global registered shares are similar to ordinary shares except that investors can trade them on stock exchanges around the world in many currencies.
For example, if a publicly traded company issues shares in dollars on the New York Stock Exchange (NYSE) and issues the same security in pounds on the London Stock Exchange (or vice versa), then it is issuing global shares.
Benefits of GRSs
A Global Share allows for cross-market portability, while generally costing less than other instruments of its type. Because of increasing globalization, securities might trade in multiple markets going forward, which could make the concept of ADRs less valid, but would make GRSs more attractive.
As trading moves toward a round-the-clock timetable, various stock markets and clearing houses could consolidate, which would make global shares more convenient. Moreover, the regulatory structures of different markets could become more aligned. It would make it less necessary for securities to comply with different local regulations.
Finally, a global fungible security is likely best suited to track liquidity around the world.
Slow to the Start; Fast to the Finish Line?
Most companies that list securities in the U.S. want access to the broadest range of U.S. investors possible. Some securities experts believe that moving from an ADR to a GRS would do just the opposite and reduce liquidity instead of enhance it.
Another potential problem is whether the global trading system would be able to handle widespread trading of GRSs. Despite of the consolidation in the industry — trading still is influenced by regulatory bodies that are national, not international.
Some critics believe that the cost of creating GRS programs would be too great, thus offsetting any benefits; and that too much would need to change too fast in order for GRSs to work effectively in the near term.
Although no one knows what may come of GRSs as a trading tool going forward, the comfortable tradition of ADRs combined with the problems of balancing local market regulations. It will deal with the U.S. rules . Then, it could well deter finance managers from issuing quantities of global shares any time soon.
