What are subscription receipts as a financial market term?

Subscription receipts are financial instruments that represent the right to receive securities, typically shares, upon the completion of a specific transaction, such as a merger or acquisition. They are often issued by companies during capital-raising efforts and are used to provide investors with a way to invest in a forthcoming offering before it is finalized. Subscription receipts can trade on exchanges like regular securities, allowing investors to speculate on the value of the underlying shares before they are issued. Once the transaction conditions are met, the receipts convert into the underlying securities.