Depositary Bank

Depositary Bank

A bank that keeps assets or securities on behalf of a client. All retail banks are depositary banks, because they hold money for account holders.

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Depositary bank. A US bank that holds American depositary shares (ADSs), or shares of corporations based outside the United States, and sells American depositary receipts (ADRs) to US investors is called a depositary bank.

Each ADR represents a specific number of ADSs, based on the bank's agreement with the issuing corporation. The depositary bank ensures that investors receive dividends and capital gains and handles tax payments that may be due in the country where the share-issuing company is headquartered.