CSIMarket


Terms Beginning with A
       
       
 

ADR American Depositary Receipt

Financial Term


An American Depositary Receipt (ADR) is a negotiable certificate that represents ownership in shares of a foreign company held in custody by a U.S. financial institution. The ADRs are traded on U.S. stock exchanges like regular stocks and allow U.S. investors to invest in foreign companies without needing to deal directly with foreign exchanges or currencies.

ADRs are issued by a U.S. depositary bank which works with the foreign company to develop an appropriate ADR program that meets the needs of both the foreign issuer and investors in the U.S. market. The depositary bank typically purchases shares of the foreign company in the local market and then sells the ADRs to U.S. investors. The depositary bank is responsible for the custody of the underlying shares, as well as for keeping track of dividend payments, stock splits, and other corporate actions.

ADRs are commonly used by foreign companies looking to raise capital in the U.S. market, as they provide a cost-effective way of accessing American investors. U.S. investors, in turn, benefit from the ability to invest in foreign companies without needing to overcome the logistical challenges and costs associated with international investing. ADRs provide greater liquidity to foreign stocks by creating a market for them in the United States, which increases investor demand and thereby the value of the underlying shares.

Overall, ADRs are a key investment vehicle in the financial industry, providing opportunities for both issuers and investors.


   
     

ADR American Depositary Receipt

Financial Term


An American Depositary Receipt (ADR) is a negotiable certificate that represents ownership in shares of a foreign company held in custody by a U.S. financial institution. The ADRs are traded on U.S. stock exchanges like regular stocks and allow U.S. investors to invest in foreign companies without needing to deal directly with foreign exchanges or currencies.

ADRs are issued by a U.S. depositary bank which works with the foreign company to develop an appropriate ADR program that meets the needs of both the foreign issuer and investors in the U.S. market. The depositary bank typically purchases shares of the foreign company in the local market and then sells the ADRs to U.S. investors. The depositary bank is responsible for the custody of the underlying shares, as well as for keeping track of dividend payments, stock splits, and other corporate actions.

ADRs are commonly used by foreign companies looking to raise capital in the U.S. market, as they provide a cost-effective way of accessing American investors. U.S. investors, in turn, benefit from the ability to invest in foreign companies without needing to overcome the logistical challenges and costs associated with international investing. ADRs provide greater liquidity to foreign stocks by creating a market for them in the United States, which increases investor demand and thereby the value of the underlying shares.

Overall, ADRs are a key investment vehicle in the financial industry, providing opportunities for both issuers and investors.


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