Sponsored ADR

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Sponsored ADR

An American Depositary Receipt issued with the knowledge and cooperation of the company whose stock backs it. Unlike other ADRs, which simply give the monetary benefits of ownership, sponsored ADRs are treated just like common stock, complete with voting rights, only denominated in the U.S. dollar. In order for an ADR to trade on the New York Stock Exchange, it must be sponsored. See also: International depositary receipt.
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These banks can create sponsored ADRs, meaning there's a formal agreement between the company and the issuing depositary bank, or unsponsored ADRs with no formal agreement.
'Sponsored ADRs can create added visibility and other benefits for non-U.S.
Level 1 depositary receipts are the first level of sponsored ADRs that can be issued and may only be traded on the OTC market.
Zoltav's GDRs in Rosneft OJSC were sold for USD271,994.76, its sponsored ADRs in Gazprom were sold for USD259,997.63 and its ADRs in Lukoil OAO were sold for USD165,892.39.
Sponsored ADRs have one depositary bank that is appointed by the issuer who pays a fee to the depositary bank.
There are three levels of sponsored ADRs. A level-I ADR is not subject to full SEC reporting requirements and need not comply with U.S.

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