American Depositary Receipt


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Related to American Depositary Receipt: Adr, American Depositary Receipt Fees

American Depositary Receipt (ADR)

Certificates issued by a US depository bank, representing foreign shares held by the bank, usually by a branch or correspondent in the country of issue. One ADR may represent a portion of a foreign share, one share or a bundle of shares of a foreign corporation. If the ADR's are "sponsored," the corporation provides financial information and other assistance to the bank and may subsidize the administration of the ADR. "Unsponsored" ADRs do not receive such assistance. ADRs are subject to the same currency, political, and economic risks as the underlying foreign share. Arbitrage keeps the prices of ADRs and underlying foreign shares, adjusted for the SDR/ordinary ratio essentially equal. American depository shares (ADS) are a similar form of certification.

American Depository Receipt

A certificate issued by an American bank representing a share of a foreign stock that the bank holds in trust but that is traded on an American stock exchange. An American depository receipt is dollar-denominated and entitles the bearer to any dividends and other benefits associated with the stock underlying it. ADRs can be traded like any other security. ADRs shield investors from foreign exchange risk and any applicable tariffs they would have had to pay if they had bought the stock outright. They also exempt the investor from any other requirements the foreign exchange authority might have levied. See also: International Depository Receipt.

American Depositary Receipt (ADR)

The physical certificate for an American Depositary Share. American Depositary Shares trade electronically, but only American Depositary Receipts can be delivered to an investor. American Depositary Shares and their companion American Depositary Receipts always exchange on a one-for-one basis. Although American Depositary Receipts and American Depositary Shares are different, the terms are frequently used interchangeably. See also sponsored American Depositary Receipt, unsponsored American Depositary Receipt.
Are foreign securities traded in U.S. markets?

Stocks of some, especially large, foreign companies traded in the U.S. markets are traded as American Depositary Receipts (ADRs). ADRs are receipts for the shares of a foreign corporation held by a U.S. depositary bank. The receipts are traded openly on the U.S. markets, and the owner (shareholder) is entitled to all dividends and capital gains. Each ADR represents a determined ratio of the foreign stock, and the price of the ADR corresponds to the price of the stock in the home market adjusted for this ratio.

ADRs traded in the U.S. markets will clear and settle in U.S. dollars. The depositary bank will also convert, for a small fee, any dividends to U.S. dollars.

Thomas M. Tarnowski, Senior Business Analyst, Global Investment Banking Division, Citigroup, Inc.—Salomon Smith Barney, New York, NY, and London, UK

American depositary receipt (ADR).

Shares of hundreds of major overseas-based companies, including names such as British Petroleum, Sony, and Toyota, are traded as ADRs on US stock markets in US dollars.

ADRs are actually receipts issued by US banks that hold actual shares of the companies' stocks. They let you diversify into international markets without having to purchase shares on overseas exchanges or through mutual funds.

References in periodicals archive ?
American Depositary Receipts have been registered pursuant to the US Securities Act of 1933.
equity, particularly in the form of American Depositary Receipts (ADRs) -- essentially, stocks of foreign-listed companies sold in the U.S.
Lewis says "Global Investing is a newsletter for investors seeking to build an international portfolio of stocks and bonds from around the world without leaving Wall Street or their regular brokers." GI covers American Depositary Receipts, closed-end country funds, WEBS, and foreign stocks based in the U.S.
The staggering variety of investment opportunities along the information superhighway was driven home recently when the Wall Street Journal ran a story entitled, "Mexican Internet Stocks Catch on Fire with Wall Street's Investors and Firms." In it, the financial paper of record said the "Mexican media bellwether" Grupo Televisa, SA needed to expand a secondary offering of its American depositary receipts after announcing an ambitious Internet strategy, and that its holding company Grupo Televicentro SA had raised $1.13 billion by selling off a 9.1 percent stake in its subsidiary.
You can purchase individual shares of U.S.-based companies, but those located overseas must be purchased through American Depositary Receipts or Shares (ADRs or ADSs), vouchers representing blocks of stocks that are held by intermediaries such as banks or brokers.
(NYSE: TDR) American Depositary Receipts (ADRs) began trading May 5 on the New York Stock Exchange (NYSE) under the ticker symbol "TDR." The initial public offering consists of 5.7 million shares of Tricom S.A.
Akzo's American Depositary Receipts (ADRs) are listed on NASDAQ (symbol AKZOY).
Because of today's global markets, personal financial planners and tax accountants are finding more and more American depositary receipts (ADRs) in clients' portfolios.
Earlier offerings had been in the form of American Depositary Receipts. In the offering, 84 percent of shares will be through GDRs, or 54,998,830 GDRs, equivalent to 10,999,766 shares.
Global Banking News-November 8, 2018--Citibank fined for mishandling American Depositary Receipts

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