American Depository Receipt

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Related to American Depository Receipt: American Depositary Receipt Fees, Global Depository Receipt

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 Depository Receipt (ADR)

a certificate of ownership issued to an individual or company investor by a US bank which holds (on deposit) the investor's or company's STOCKS and SHARES. The ADR serves as proof of the ownership of the securities held by the bank and can be used as a negotiable instrument.

American Depository Receipts have been used extensively by UK companies wishing to encourage investment by US institutional investors. Such companies lodge a proportion of their shares with a US bank, which then issues depository shares which can be traded on the US stock market.

References in periodicals archive ?
Upon closing, High River will receive a total of 1,390,074 additional shares of Buryatzoloto in the form of 38,444 common shares, 1,211,470 American Depository Receipts ("ADR"s) and 140,160 Convertible Preference "A" shares.

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