CDRs provide an affordable way for Canadians to invest in global companies
through fractional share ownership and with a built-in notional currency hedge
TORONTO, July 26, 2021 /CNW/ - CIBC, NEO, and CIBC Mellon are excited to announce the launch of the first-ever Canadian Depositary Receipts ("CDRs"), which will be listed on the NEO Exchange. CDRs represent a groundbreaking innovation in the way Canadian investors buy and hold shares of global companies.
Modeled after the American Depositary Receipts ("ADRs") market, CDRs make it easy to invest in some of the world's largest companies – in Canadian dollars. Offered at a fraction of the price per share of the underlying reference share, and with a built-in notional currency hedge, CDRs provide investors with affordable access to foreign stocks while mitigating the currency risk associated with global investing.
The first CDRs that will be available for trading on the NEO Exchange are listed below, with many more planned for the future:
- Alphabet Canadian Depositary Receipts (CAD Hedged) – GOOG
- Amazon.com Canadian Depositary Receipts (CAD Hedged) – AMZN
- Apple Canadian Depositary Receipts (CAD Hedged) – AAPL
- Netflix Canadian Depositary Receipts (CAD Hedged) – NFLX
- Tesla Canadian Depositary Receipts (CAD Hedged) – TSLA
"CIBC is committed to developing innovative, market-based solutions that address investor needs," said Christian Exshaw, Managing Director and Head, CIBC Global Markets and Direct Financial Services. "As a Canadian industry-first, CDRs will allow investors to affordably purchase global equities, access institutional FX rates, and efficiently manage their currency risk."
To bring CDRs to market, CIBC partnered with CIBC Mellon to leverage their global operational capabilities and custody asset servicing expertise, and with the NEO Exchange to list the inaugural CDRs, based on the exchange's continuous commitment to innovation.
"At NEO, innovation is part of our DNA. We pride ourselves on doing things differently to level the playing field for investors, while modernizing Canadian capital markets," said Jos Schmitt, President and CEO of NEO. "We are honoured to partner with CIBC and CIBC Mellon on this game-changing initiative, and look forward to championing CDRs on the NEO Exchange."
"The Canadian market continues to demonstrate an appetite for innovative offerings that help investors achieve their goals more efficiently," added Ash Tahbazian, Chief Client Officer, CIBC Mellon. "The team at CIBC Mellon is proud to collaborate with CIBC and the NEO Exchange and leverage our global operational capabilities to bring CDRs to Canadian investors."
For more information about CDRs, please visit https://cdr.cibc.com or www.neo.inc/en/services/raising-assets/canadian-depositary-receipts.
CIBC is a leading North American financial institution with 10 million personal banking, business, public sector and institutional clients. Across Personal and Business Banking, Commercial Banking and Wealth Management, and Capital Markets businesses, CIBC offers a full range of advice, solutions and services through its leading digital banking network, and locations across Canada with offices in the United States and around the world. Ongoing news releases and more information about CIBC can be found at www.cibc.com/en/about-cibc/media-centre.html.
About the NEO Exchange
The NEO Exchange is Canada's Tier 1 stock exchange for the innovation economy, bringing together investors and capital raisers within a fair, liquid, efficient, and service-oriented environment. Fully operational since June 2015, NEO puts investors first and provides access to trading across all Canadian-listed securities on a level playing field. NEO lists companies and investment products seeking an internationally recognized stock exchange that enables investor trust, quality liquidity, and broad awareness including unfettered access to market data.
About CIBC Mellon
CIBC Mellon is a Canadian company exclusively focused on the investment servicing needs of asset managers, asset owners, insurance companies and global institutional investors into Canada. As at June 30, 2021, CIBC Mellon had more than C$2.4 trillion of assets under administration. CIBC Mellon is part of the BNY Mellon network, which as at June 30, 2021 had US$45.0 trillion in assets under custody and/or administration. CIBC Mellon is a licensed user of the CIBC trade-mark and certain BNY Mellon trade-marks, is the corporate brand of CIBC Mellon Global Securities Services Company and CIBC Mellon Trust Company, and may be used as a generic term to refer to either or both companies. www.cibcmellon.com