apply to CDIs. They are not withdrawable or depositable into/out of CREST. This is because a CDI is an electronic reflection of the underlying security held in the domestic (country of origin) market. The security provided by CDI are "international securities" in deed poll which includes security through equity shares, Eurobonds, domestic bonds and depository receipts. International securities must be eligible to be held within or through a CSD, which includes Euroclear, DTC, SIS SegaIntersettle (the Swiss clearing system) and any other national or international central securities depositories from time to time specified in the CREST International Manual. The economic rights are not affected by the use of the CDIs. How does it work? To take the US as an example, the electronic settlement system in the US is called DTC and if a shareholder holds electronic stock in the US they will hold their securities electronically in DTC. In reality, they will hold the securities via a custodian, so the custodian's nominee details will appear on the company's register. This is known as holding stock in the 'domestic' market. Securities held this way can only be traded domestically i.e. in the market of the country of origin. If the shares are listed in more than one market (for example in the US and in the UK) a shareholder who wants to trade their securities within CREST outside of the US 'domestic' market can instruct their custodian (in this example the DTC) to transfer the securities to the CREST account within DTC. Restrictions apply, only securities that have a UK quote can be transferred to CREST's DTC account. CREST is a member of DTC. Once the securities have been transferred from the shareholder's account within the DTC and into CREST's account CREST will 'create' the CDI within the CREST and the CDI will appear in the shareholder's account within CREST where the CDI can now be traded in the UK market. The CDI which is traded within CREST will typically have the same ISIN as the UK share itself. The legal holder to the share will continue to be the nominee for the DTC. Stamp Duty Reserve Tax HMRC consider that a CDI is a chargeable security for the Stamp Duty Reserve Tax. However, where the underlying security is loan capital and that loan capital satisfies the loan capital exemption the trade of the CDI should be exempt from SDRT.