American Depositary Receipts (ADR)
American Depositary Receipts (ADRs)
ADR are freely traded in the U.S. and Europe, can be listed on stock exchanges and used to raise capital in the international market. It is also one of the investment options, in addition to the market (Forex). As a rule, ADR issuers are publicly traded companies or companies that are transforming into open companies that want to have international investors and a certain amount of stock flexibility.
The issuance of ADRs has a number of advantages. Through the issuance of American Depositary Receipts, an expansion of the securities marketThe company's image improves, the number of potential investors grows, and access to international markets is gained.
Types of ADR owners
It is quite important for an issuing company to know who the owners of depositary receipts are. Ownership identification can enhance an issuer's investor relations efforts, potentially increasing its visibility in international financial markets and increasing the liquidity of its ADRs.
There are two types of owners: registeredwho are the actual holders of the ADRs, and beneficiary owners, держателями чьих АДР является третья сторона, и которые значатся в реестре под именем «номинального держателя». Зарегистрированные собственники непосредственно значатся в реестре эмитента или у его трансфер-агента в США. Собственники-выгодоприобретатели, в число которых входят как индивидуальные, так и институциональные инвесторы, физически не владеют принадлежащими им сертификатами; их ценные бумаги держит от их имени третья сторона — брокер-дилер или банк-кастоди. Для компаний, верящих в стратегическую необходимость связей с инвесторами, идентификация собственников является необходимостью. Инвесторы имеют возможность выбирать из более чем 2000 расписок из 60 стран.
Depository receipts market
Analysts divide the market for depositary receipts into three main groups:
- Traditional;
- Developing;
- Future ones.
Traditional markets for depositary receipts include: Australia, Denmark, England, Finland, Germany, Hong Kong, Israel, Italy, Japan, Luxembourg, Mexico, Netherlands, Norway, Portugal, Ireland, South Africa, Sweden, Switzerland. More than 72% programs were in the above group. The rest of the projects were conducted in emerging markets. Quite promising markets for depositary receipts promise to be: Egypt, Jordan, Romania, Vietnam and Morocco.
American Depositary Receipts in Russia
ADR - one of the modern tools of the market, which has proven its reliability as a means of attracting capital. Issue American Depositary Receipts is currently the main way of selling Russian securities in the United States. At the same time, it is a promising opportunity to attract foreign investment in the Russian economy.
This type of receipt is issued by a depositary bank in the United States. Each of them provides an opportunity to hold title to one or more Russian securities held by a domestic custodian bank. By selling depositary receipts to foreign investors in the international market, a Russian company simultaneously sells its securities represented by them.
Cheapness of the projects of issuing American depositary receipts, the ease of transactions with them, the possibility of reducing the tax burden make them a profitable investment, both for Russian issuers and foreign investors.
Also, one of the indisputable advantages for investors is that prices are quoted in the US currency and dividend payments are also made in US dollars, which helps avoid currency conversion costs. In the future, along with Eurobond issuance, depositary receipts may be used in the restructuring of Russia's foreign debt. In addition to this, depository receipts — многогранный инструмент для международного слияния и поглощения различных компаний, который позволяет to the investor considerably simplify the company purchase procedure and increases its mobility and ability to react adequately to changes in market conditions. Investor transactions in depositary receipts "take place in accordance with U.S. law, in a manner similar to trading in U.S. securities.
Examples of ADR appearance
