two-way trading(redirected from 2 Way Trading)
The legal ability to convert Global Depository Receipts into ordinary shares and vice versa. A Global Depository Receipt is a certificate issued by a bank representing shares of a stock the bank holds in trust but that are traded on a foreign stock exchange. It is denominated in the local currency, and entitles the bearer to any dividends and other benefits associated with the shares. Different governments have different regulations as to how shares may be converted into Global Depository Receipts; those that allow two-way trading have the fewest regulations.
The ability to convert ordinary shares into American Depositary Receipts or Global Depositary Receipts following an earlier conversion of ADRs or GDRs into ordinary shares. In February 2002 the Indian government for the first time approved two-way trading of ADRs. Until then ADRs could be placed in the United States but, if converted back into ordinary shares for trading in India, could not again trade as ADRs. Two-way trading improves the liquidity of ADRs and GDRs.