What is a global registered share? 

Typically, a company’s shares are traded primarily in its country of origin, on a stock exchange in its local currency.

Global registered shares (GRS) are US financial securities that can be listed and traded on stock exchanges around the world without requiring conversion to other countries’ local currency. GRS can be traded in multiple currencies by issuance of identical shares on whichever stock exchange they need to trade on.

How does a global registered shares work?

Exactly what is a global registered share? Perhaps the best way to explain this is through a global registered share example. 

Say a publicly-listed company in London issues its shares in the British pounds (GBP) on the London Stock Exchange (LSE) while also issuing identical shares on the New York Stock Exchange (NYSE) in US dollars (USD). The holder of this company’s shares would be able to trade on both LSE and NYSE, reaping the advantage of holding a global share.

Pros and cons of global registered shares

Having explained global registered shares, let’s consider some of the benefits and drawbacks of holding them.

Benefits of GRS

Portability: These securities are portable across international stock exchanges. They have a cost benefit and are generally cheaper than other similar instruments.

Convenient choice: GRS are a means to consolidate clearing house mechanisms as stock exchange trading starts to become 24/7. Additionally, the nature of global registered shares means they are less required to comply with regulations of the different countries they trade in.

Drawbacks of GRS

Liquidity: In order to have access to easy liquidity, US companies tend to want as many US domiciled investors as possible. With global shares there could be a negative impact on liquidity.

Coordination and clearance hassles: GRS trading would require a sign-off from multiple clearing houses across the world, therefore getting securities issued to the public could be a challenging process. The coordination between the US Securities Exchange Commission (SEC) and other global regulatory bodies would also require significant costs, thus reducing the lure of trading in GRS.a