A Comparative Study Of Overseas Depository Receipt System

In the first half of 2018,the General Office of the State Council and the China Securities Regulatory Commission issued regulations on the establishment of Chinese depositary receipt system.Government encourages innovative companies,including "BATJ",to return to the A-share market.And at the same time many well-known companies have also expressed their willingness to return to the Chinese capital market at the right time.It suggest that the official launch of depositary receipts is imminent.However,some problems will be exposed after the issue of the depositary receipts.It is necessary to study how to ensure the vitality of the depositary receipts market,enrich Chinese multi-level capital market system,and adjust the economic structure.This paper adopts the method of comparative analysis to compare the depositary receipts system in the United States,Taiwan and Hong Kong.As the country who created depositary receipt,American market transaction and regulatory system is very ripe.Taiwan built depository receipts system in the 1990 s,but the development of the market is very slow.To promote the development of capital market,the authorities called for "Salmon returning " in 2007 and encouraged Taiwanese companies,which listed in southeast Asia to back to Taiwan.Although they have made many efforts,the result of those measures is unsatisfactory.Nowadays,the Chinese government encourages innovative companies to return to A-shares market.Taiwan experience may have referential significance to Chinese depositary receipt system.The Hong Kong depositary receipt system has been launched for 10 years,but only four depositary receipts have been issued.At present,only one of them are still trading.Learning from the failure experience of Hong Kong may prevent CDR from going to a wrong path.Firstly,this paper introduces the basic concepts,operation mechanism and market development in the United States,Taiwan and Hong Kong.Secondly,it compares the issuance and transaction systems of depositary receipts in the United States,Taiwan and Hong Kong.And find that the level of the depositary receipt market,the exchange mechanism with underlying stocks and the degree of openness of the local market are closely related to the long-term development of the market.At the same time,offering a relatively relaxed issuance environment for high-tech enterprises,properly relaxing restrictions on issuance and transactions,and actively building a multi-level market may have a positive effect on participants.Thirdly,it compares regulatory regime between three areas.For the long-term healthy development of the market,the regulation of information disclosure and investor protection should not be ignored.And special attention should be paid to preventing information asymmetry and protecting shareholders' rights and interests.In addition,different regions apply different genealogy of law.Government should based on Chinese conditions when making rules,and pay attention to the implementation of the provisions.Finally,the paper get some conclusions may contribute to the improvement of Chinese depositary receipt system.