CIBC launches first depositary receipts

CIBC is launching Canada’s first depositary receipts, giving Canadian investors access to fractional shares of large U.S. tech companies without the currency risk.

The first Canadian depositary receipts (CDRs) were inspired by the trillion-dollar American depositary receipts (ADR) market and Canadian investors’ appetite for global equities, CIBC said in a release.

The Amazon CDR will launch Tuesday on the NEO Exchange, with CDRs for Alphabet, Apple, Netflix and Tesla to follow in the coming weeks.

CDRs allow investors to buy a fraction of a share in large companies such as Amazon, whose share price might otherwise be prohibitive for retail investors. The products also come with an embedded currency hedge at institutional rates, mitigating the risk from foreign currency.

CIBC Mellon will be the fund custodian for the new products.

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