American Depositary Receipt (ADR)
A negotiable certificate issued by a U.S. bank representing a specified number of shares (or one share) in a foreign stock that is traded on a U.S. exchange. ADRs are denominated in U.S. dollars, with the underlying security held by a U.S. financial institution overseas. ADRs help to reduce administration and duty costs that would otherwise be levied on each transaction. Investopedia Says:
This is an excellent way to buy shares in a foreign company while realizing any dividends and capital gains in U.S. dollars. However, ADRs do not eliminate the currency and economic risks for the underlying shares in another country. For example, dividend payments in euros would be converted to U.S. dollars, net of conversion expenses and foreign taxes and in accordance with the deposit agreement. ADRs are listed on either the NYSE, AMEX or Nasdaq. Related Terms:
American Depositary Share - ADS
Chines Depositary Receipt - CDR
Depositary Receipt
Flowback
Global Depositary Receipt - GDR
International Depository Receipt - IDR
Linkage
Participatory Notes
Spiders - SPDRs
Unsponsored ADR |