Write short notes on the following: Two-way fungibility of GDRS;

Two-way fungibility of Global Depositary Receipts (GDRs) GDR issued can be converted into underlying assets of the issuing company on the choice of the investors. After converting into underlying assets, investor will receive all benefit of new instruments but lose the benefit of GDR. If investor is not finding the conversion very lucrative or fruitful, can convert it again into GDR and will start enjoying the same benefit of GDR again. This is known as two way fungibility or Reverse Fungibility. A limited Two-way Fungibility scheme has been put in place by the Government of India for GDRs. Under this scheme a stock broker in India, registered with Securities Exchange and Board of India can purchase shares of an Indian company from the market for conversion into GDRs based on the instructions received from overseas investors. Reissuance of GDRs would be permitted to the extent of GDRs which have been redeemed into underlying shares and sold in Indian market. The scheme thus, provides for purchase and re-conversion of only as many shares into GDRs which are equal to or less than the number of shares emerging on surrender of GDRs which have been actually sold in the market.