Depository receipts of Russian companies in foreign mar

INTRODUCTION

The urgency of the topic is that depositary receipts are a mutually beneficial tool for both domestic companies and foreign investors wishing to acquire a share in a foreign enterprise.
For issuers it is an additional source for attracting foreign capital. They provide an opportunity to enter the international market, expanding the range of potential investors, liquidity, share prices, as well as earning a reputation.
For investors, depositary receipts provide an opportunity to diversify the portfolio, as well as to receive dividends and vote. That is, in fact, they have all the advantages of shares. In addition, the transaction on depositary receipts is carried out under the legislation of the investor´s country, so there are no special difficulties in their acquisition.
More importantly, investors will be able to benefit from more profitable and more risky investments, but without additional risks of switching directly to foreign markets, which could lead to lack of transparency or instability as a result of changes in regulatory procedures.
The creation of RDRs is an incentive to invest in the national legal environment for private investors and the only possibility, in the absence of foreign securities on the Russian market, to apply international diversification for companies managing investment funds.
It should be noted that in the conditions of traditional contradiction between preventing capital outflow from the country and integration into the world economic space, it is important not only to create investment attractiveness of the national economy, but also to increase competitiveness and liquidity of the national securities market. The most reasonable payment for this is the degree of openness of the economy, which simultaneously with the attraction of foreign participants of the stock market would exclude the uncontrolled export of capital in case of an unfavorable situation. It is obvious that investing in RDRs is a form of capital outflow that is more subject to state regulation than the free access of an investor to the global market. Therefore, the emergence of RDRs should be organized by the state and become an integral and integral part of the stock market development, not a result of this development. The market is ready for this appearance already now.
The model for building a market for depositary receipts may be between two polar options - the traditional model adopted on the world´s leading exchanges and the Argentine model, which has the opposite direction.
The first one is designed for a global market, where issuers achieve their standard objectives and investors take advantage of global market opportunities in the national legal environment where the market is located. It certainly needs to be pursued, but the entry of global issuers through sponsored RDRs into our market appears to be permanent and may have research or long-term goals, which does not imply a surge in liquidity but will positively affect its reputation. Such issuers may include foreign companies affiliated with Russia, as well as companies from the former Soviet Union that have outgrown the national market but are unknown on world stock exchanges. In principle, they can master the whole range of forms of ADR sponsored existence. But the term of development is not considered now, it is enough to remember that in the U.S. from the appearance of the first ADRs to the emergence of a developed market of depositary receipts, more than 50 years have passed.
Moreover, it is likely that non-sponsorable private RDRs will be issued - this would be a step in the development of the Russian market, which, without weathering, is necessary as a basis for attracting future Sponsored Depositary Receipts of different levels, starting from the "private placement form" (if ADR levels are correctly applied to RDRs). Here we look at the analogy with the second option of building a market for depositary receipts.
The peculiarity of

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