A Luxembourg Depository Receipts (LDR) is a certificate which represents the purchase, or ownership, of foreign assets which are deposited in a Luxembourg-based account. An LDR functions in much the same way as a Global Depositary Receipt (GDR). LDRs may represent ownership of either an underlying number of shares

Share (finance)

A joint stock company divides its capital into units of equal denomination. Each unit is called a share. These units are offered for sale to raise capital. This is termed as issuing shares. A person who buys share/shares of the company is called a shareholder, and by acquiring share or shares in...

 or a notional amount of bonds

Bond (finance)

In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest to use and/or to repay the principal at a later date, termed maturity...

.

Luxembourg Depository Receipts are particularly useful where an institution wants to ensure safe keeping of assets, i.e., in Luxembourg

Luxembourg

Luxembourg , officially the Grand Duchy of Luxembourg , is a landlocked country in western Europe, bordered by Belgium, France, and Germany. It has two principal regions: the Oesling in the North as part of the Ardennes massif, and the Gutland in the south...

, but needs a specific national or regional banks' expertise in handling a variety of transactions (including but not limited to the sale of shares to local markets).

Prices of LDRs are often close to the value of the related instrument but they are traded and settled independently and often in smaller lots (particularly in the case of bonds).

Trading and settlement of LDRs is difficult to quantify as the use of local markets makes analysing the size of this market quite difficult.