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The Palestinian Capital Market Authority issues the rules and procedures to issue Global Depository Receipts

2011-06-28

The Palestinian Capital Market Authority has issued the rules and technical procedures for the issuance of Global Depository Receipts GDR against to financial securities listed on the Palestinian stock exchange. This comes within the Authority’s efforts in maintaining the stability and development of the Palestinian financial securities sector, and to promote the legal and regulatory environment of the sector according to the international standards. The Global Depository Receipts are a financial tradable instrument in the international capital markets issued by international institutions (such as Bank of New York or, Deutsche Bank) in U.S. dollars or other traded foreign currencies against the retention of a balance of local shares, based on an agreement with a local issuer company. The owner of the GDRs has all the rights enjoyed by the local shareholder in terms of cash or stock dividends distribution. The Authority’s supply of a legal and technical environment is necessary to run the GDRs is considered a key element in enhancing the  opportunities for diversification in the available investment instruments in the financial securities sector, where this instrument will join stocks and bonds as a potential investment tools to investors. It is expected for GDRs to play an important role in activating the trading in the Palestinian Stock Exchange by broadening the foreign institutional investment base, including working to strengthen and increase the liquidity of local shares.