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Temeljna svrha ovog rada je ispitivanje uloge investicijskih fondova koji postaju sve atraktivniji oblik investiranja na hrvatskom tržištu kapitala. Investicijske fondove osniva i njima upravlja društvo za upravljanje investicijskim fondovima. Imovinom investicijskog fonda upravlja depozitna banka kao neovisna institucija kojoj je glavni cilj zaštitili interese investitora, dok nadzor nad poslovanjem investicijskog fonda i društva za upravljanje vrši HANFA kako bi isti poslovali u skladu sa zakonom. Analizom investicijskih fondova u Hrvatskoj uočeno je kako je broj investicijskih fondova u stalnom porastu, od kojih prevladavaju UCITS fondovi kao otvoreni fondovi koji su namijenjeni širokoj javnosti, dok su AIF-ovi koji ulažu u rizičniju imovinu manje zastupljeni. Broj udjelničara i vrijednost neto imovine u prošlom petogodišnjem razdoblju zabilježili su rast uz iznimku u 2020. godini u kojoj se smanjio i broj udjelničara i vrijednost neto imovine fondova kao posljedica nastupanja koronavirusa koji je stvorio nestabilno okruženje na svjetskom pa tako i hrvatskom gospodarstvu. Promatranjem kretanja neto imovine fondova prilikom nastupanja globalne financijske krize i koronakrize možemo zaključiti da su investitori izrazito osjetljivi na pojave nestabilnosti na tržištu. U kratkom roku investitori postaju oprezniji i konzervativniji prilikom ulaganja te istodobno povlače svoje udjele iz fondova kako bi ulagali u sigurnije oblike ulaganja, što nerijetko dovodi do problema s likvidnosti kod investicijskih fondova. The main topic of this paper is the research of the investment funds, which are becoming more and more attractive form of investment in the Croatian capital market. Investment funds are established and managed by an asset management company. Depository bank manage the investment fund’s asset and its main goal is to protect the interests of investors. On the other hand, HANFA is in charge of supervising the operations of the investment fund and the asset management company. The analysis of investment funds in Croatia shows us how the number of investment funds is constantly increasing, and they are mostly consist of UCITS funds as open-end funds intended for the general public, while AIFs (that invests in riskier securities) are less represented. The number of investors and the value of net assets increased in the past five years, with exception in 2020. When the same indicators decreased because of the coronavirus that appeared in the beginning of March and created an unstable environment in the world and Croatian economy. By observing the movement of net asset’s value during the global financial crisis and corona crisis, we can conclude that investors are extremely sensitive when the market instability occurs. In the short term, investors become more careful and conservative during investing and at the same time, they withdraw their units from funds so they can invest in safer forms of investment, which often leads to liquidity problems for investment funds.

The main role of a depositary is to protect investors by providing safekeeping and monitoring services. In Europe in general and in France in particular, it is common for funds and their depositary belong to the same financial group. This ownership linkage between funds and their depositary can affect the effectiveness of the depositary services, and investors might not be well protected. Using a sample of 1,515 French equity funds designed for retail investors, I investigate the effects of the dependence of depositaries on investor protection by comparing performance, risk taking and fees between independent and dependent-depositary funds. The results show that an independent depositary seems to approve more ‘fair’ fees than a dependent depositary. However, there is no significant difference in performance or in risk taking between these two types of funds. Nevertheless, retail investors seem to care about the independence of the depositary.

International investments have become a trend in the past decade and depository receipts (DRs) provide indirect investment in securities of foreign issuers. In this paper, we applied the event study methodology to examine the information effect of announcements on depositary receipt listing and stock reward fluctuation in electronics companies behavior during 1990 to 2006. Empirical evidence demonstrates that listing depositary receipts leads to negative abnormal returns around the recommendation date when listed depositary receipts in the electronics industries.

In this paper, we study depositary receipt prices in regulated markets and free-entry markets. Because of their unique environments, the Taiwanese and Hong Kong markets provide interesting settings that have not yet been explored in the literature. In particular, we focus on the following: (1) the difference in the long-term price relationships between depositary receipts and underlying securities in free-entry and regulated areas, (2) the price dynamics of the depositary receipts for firms with and without the long-term equilibrium relationships between depositary receipts and underlying securities, and (3) the incremental information content of the qualified foreign institutional investor (QFII) ownership ratio for the depositary receipts issued by Taiwanese firms. The empirical results reveal that long-term equilibrium relationships between depositary receipts and underlying security prices exist for firms listed in Hong Kong, a free-entry market, but do not necessarily exist for firms listed in Taiwan with foreign ownership restrictions. The long-term equilibrium relationships between depositary receipts and underlying securities and the local market conditions are the most important factors in explaining the depositary receipt returns when the equilibrium exists. In the absence of equilibrium, the lagged returns of depositary receipts or underlying securities and the local market conditions become important. In addition, QFII ownership ratios significantly explain the depositary receipt price variations in a regulated market, which implies the restriction effect on the price dynamics of the depositary receipts.

Notes rapid growth in the number of depositary receipt (DR) listings on US exchanges and presents a study of those from East Asia. Explains how they allow US investors to trade in the equity or debt of non‐US companies through US institutions and reviews the relevant literature. Classifies 605 East Asian DRs at March 2000 by country, year of issue, sponsorship status, exchange, depositary bank and industry; and discusses reasons for the differences found. Tests the relationship between exchange rates and the issuance of DRs and presents the results, which show that firms may be more likely to issue DRs when their home currency is strong relative to the US dollar, i.e. when they can obtain the best listing price in US markets.

This paper examines the stock price impact of international dual listings. The sample consists of 181 firms from 35 countries that instituted their first Depositary Receipt program over the period 1985–1995. The market reaction to a Depositary Receipt program is larger in magnitude and more pervasive than previously reported. The stock price reaction is related to choice of exchange, geographical location (i.e., emerging or developed markets), and avenues for raising equity capital (i.e., public versus private offerings).

In Bangladesh the establishment of Central Depository Bangladesh Limited (CDBL) added value to the stock market and plays a vital role in the progress of economic development. CDBL is engaged in the operations of the Central Depository System (CDS), a major financial market infrastructure in Bangladesh established as a part of the overall financial sector development. This study tried to analyze the growth and development of CDBL. Seven trend equations have been tested for different activities of CDBL.It is observed that CDBL was able to achieve a stable growth of listed securities in CDS, depository participants, settlement of securities transactions, documentation of CDBL, total assets and net income during the period of 2007-2015. Square of correlation coefficient (r2) has also been tested for all trend equations. It indicates the prospect of CDBL in Bangladesh is relatively bright.

The services provided by Investment and Commercial banks have generated a number of interesting debates as a result of global financial outcomes. In view of this phenomenon, this paper analyzed and reviewed the services provided by these institutions to ascertain the essence of separating or integrating their respective roles. To achieve this objective, the impact of regulation after the enactment of the Glass-Steagall and its amendment was reviewed to form a judgment. It is evidenced that the repeal of the Glass-Steagall Act resulted in deregulation giving rise to financial efficiency however, consequence of this action demonstrates that there is a greater need for regulation of specific function performed by these banks irrespective of whether they perform depository or combination of depository and investment banking.

This paper investigates the incentives of a regulator to close depository institutions, recognizing that an institution′s risk taking will be influenced by the regulator′s policy regarding bank closure and that there are opportunity costs in closing banks arising from their intermediation function. The regulator focuses not on the current portfolio of the bank, but on the bank′s future portfolio. Even if the regulator seeks to maximize welfare, the first best is not obtainable because the regulator is unable to credibly commit to certain policies regarding closure. Journal of Economic Literature Classification Numbers: G2, L5, G1.

This paper analyzes the welfare implications of banks taking equity stakes in firms under conditions of imperfect information and moral hazard. Two cases of bank control over investment decisions are analyzed. In the first, the bank does not control the investment decisions of the firm. Here, the investment efficiency is higher and bank risk is lower for an optimal positive level of bank equity holdings. However, in the case when the bank has veto power over investment proposals by the firm, there is a trade off between increased investment efficiency and increased bank risk.

The primary market is the place where securities are created. There are a number of different processes for raising capital in the primary market. When the investment bank and company raising capital decide on the best form for a specific financing, the investment bank is given the task of defining and creating the chosen instrument. The investment bank must decide when to bring the security to market and the initial price to put on the security. In addition, the investment bank has a number of specific notification requirements, both to regulators and to prospective buyers. These requirements vary from country to country, but generally, the firm must specifically describe the prospects and possible risks for a prospective buyer. When the regulatory process is complete, the investment bank selects an issuing date and announces it publicly. On the selected date, the investment bank establishes the price for the securities and, typically, using a syndicate of other firms, undertakes to sell the securities to the public and institutional investors.

EnglishThe article deals with the amendments of section 135 of the German Stock Corporation Act (‚AktG‘) by the Bill implementing the Shareholders' Rights Directive (‚ARUG‘). It considers the amendments made by the ARUG from a historical, comparative and a European perspective. Section 135 of the AktG functions as a focal point of three different aspects of corporate law: corporate governance, the securing of an adequate attendance of shareholders at shareholder meetings and procedural efficiency. Section 135 of the AktG enables four different methods of institutional representation of shareholders at shareholders' meetings: 1) representation by a proxy that is instructed by the shareholder on how to exercise the voting rights, 2) uninstructed representation along the lines of the proxy's own proposals, 3) uninstructed representation along the lines of the board's proposals, and 4) forwarding the relevant identification and authorization to a proxy that is different from the depositary bank and that is chosen by the shareholders whose shares are represented at the meeting when opening their account, or at any time thereafter. The authors hold that the reform of section 135 of the AktG marks a paradigm shift. Prior to the reform, section 135 of the AktG contained bank-specific rules that were aimed at achieving the pursuit of the shareholders' best interest (whatever this is) when depositary banks exercise voting rights. Now, section 135 of the AktG deals with the conflict of interests of institutional proxies, in general. Only the forwarding of the relevant identification and authorization to a proxy defined by the shareholders is specific to the depositary function. This duty to forward overcomes the hurdles which commercial proxy institutions face when exercising shares in German shareholders' meetings. However, the duty to forward the relevant materials to a proxy does not apply to depositaries that refrain from exercising voting rights on behalf of shareholders; it only applies to depositary banks that represent other shareholders in the shareholders' meetings. Unless the depositaries that do not engage in proxy voting forward the relevant materials voluntarily to the shareholders' proxies, Parliament is well advised to make all depositaries subject to the duty to forward the relevant materials to a proxy defined by the shareholders. DeutschDer Beitrag analysiert die Anderungen des § 135 AktG durch das Gesetz zur Umsetzung der Aktionarsrechterichtlinie (ARUG) im historischen, rechtsvergleichenden und europarechtlichen Kontext. Die Regelung steht im Spannungsfeld von Corporate Governance, Prasenzsicherung und prozeduraler Effizienz. Mit der Einzelweisung, der Generalvollmacht gemas eigenem Vorschlag des Vertreters oder gemas dem Vorschlag der Verwaltung und dem Weiterleitungsauftrag sind vier Grundmodelle der institutionellen Vertretung auszumachen. Der Beitrag geht auf diesbezugliche Detailfragen ein. Nach Ansicht der Verfasser markiert die Neuregelung einen Paradigmenwechsel von einer bankspezifischen Regel, die auf materiell richtige Stimmrechtsausubung zielte, zu einer allgemeinen Regelung von Interessenkonflikten bei der Vertretung durch institutionelle Vertreter. Nur der Weiterleitungsauftrag gem. § 135 Abs. 1 Satz 5 AktG fokussiert auf die Depotbankfunktion. Damit steht erstmals ein Instrument zur Verfugung, das die Verfahrenshurden bei der Legitimation und Bevollmachtigung kommerzieller Stimmrechtsvertreter uberwindet. Allerdings trifft nur solche Depotbanken die Weiterleitungspflicht, die im Rahmen der Vertretung tatig sind. Sollten die passiven Depotbanken nicht freiwillig den Weiterleitungsauftrag aufgreifen, ist diesem als Nukleus eines Marktes institutioneller Stimmrechtsvertretung grosere gesetzgeberische Aufmerksamkeit zu widmen.

This study evaluates the risk-adjusted performance of American Depositary Receipts (ADRs) on shares of stock of Chinese and Indian fi rms. The first part of the study examines the nature of Chinese and Indian ADRs (based on depositary bank, sponsorship status, industry classification and listing). The second part of the study evaluates the performance of these ADRs using statistical measures grounded in modern portfolio theory. Returns are adjusted for the degree of total risk and systematic risk inherent in each ADR, and the securities are then ranked on the basis of risk-adjusted performance. Two relatively new evaluation metrics, the Modigliani and Sortino measures, are used. The objective of the study is to provide documentation to global investors who are contemplating participation in Chinese and Indian stock markets via depositary receipts.

The corporate governance of investment funds was hardly studied in Italy before the reform of 1998, when the Financial Markets Consolidated Act (TUF) entered into force, amending the rules on management companies (SGRs) and introducing new corporate governance rules for listed companies. Following this reform, it is now clear that the management of SGRs is an extremely delicate and sensitive matter, especially when the legislator assigns a central role in the governance of listed companies to these intermediaries.

This chapter concerns Community rules relating to securities markets and undertakings for collective investment in transferable securities. These rules will be important for the achievement of the internal market in the field of securities by December 31, 1992.