If a foreign private issuer seeks to list ADRs on a U.S.
If a foreign company with ADRs wishes to raise capital in the United States, it would separately file a registration statement on Form F-1, F-3, or F-4. A Form F-6 contains no information about the non-U.S. Disclosure under Form F-6 relates only to the contractual terms of deposit under the deposit agreement and includes copies of the agreement, a form of ADR certificate, and legal opinions. company is either subject to the reporting requirements under the Securities Exchange Act of 1934 or is exempt under the Act.ĪDRs are always registered with the SEC on a Form F-6 registration statement. An ADR, however, may not be established unless the non-U.S. company and may be initiated by a broker- dealer wishing to establish a U.S. An unsponsored ADR is set up without the cooperation of the non- U.S. depositary bank to arrange for recordkeeping, forwarding of shareholder communications, payment of dividends, and other services. company enters into an agreement directly with the U.S. These transactions are generally performed by brokers and other types of investors who are active in foreign securities markets.ĪDRs may be “sponsored” or “unsponsored.” Sponsored ADRs are those in which the non-U.S. ADR holders may also surrender ADRs in exchange for receiving the shares of the non-U.S. exchange or the over-the- counter market. and the investor will be able to re-sell the ADRs on a U.S. The bank will issue ADRs to the investor in the U.S. securities, delivers them to the bank or its custodian in the non-U.S. company, or an investor who already holds the underlying non-U.S. market share prices.ĪDRs are created by a depositary bank when the non-U.S. The use of a ratio allows ADRs to be priced at an amount more typical of U.S. For example, for one company, an ADR may represent several shares of the underlying security, while for another company, an ADR may represent a fraction of the underlying security. settlement systems, allowing ADR holders to avoid having to transact in a foreign currency.Īn ADR may represent the underlying shares on a one-for-one basis, or may represent a fraction of a share or multiple shares. The terms ADR and ADS are often used interchangeably by market participants. It is similar to a stock certificate representing shares of stock. company that have been deposited with a U.S. Today, there are more than 2,000 ADRs available representing shares of companies located in more than 70 countries.Īn ADR is a negotiable certificate that evidences an ownership interest in American Depositary Shares (“ADSs”) which, in turn, represent an interest in the shares of a non-U.S. investors to invest in shares of a British department store. company may sometimes be referred to as a “foreign private issuer.” The first ADR was created in 1927 by a U.S. issuers use ADRs as a means of raising capital or establishing a trading presence in the U.S. depositary bank outside the United States (“U.S.”). An ADR is a security that represents shares of non-U.S. The SEC’s Office of Investor Education and Advocacy is issuing this Investor Bulletin to educate investors about American Depositary Receipts (“ADRs”). Investor Bulletin: American Depositary Receipts Required Minimum Distribution Calculator.