American Depositary Share - ADS

American Depositary Share - ADS
A U.S. dollar-denominated equity share of a foreign-based company available for purchase on an American stock exchange. American Depositary Shares (ADSs) are issued by depository banks in the U.S. under agreement with the issuing foreign company; the entire issuance is called an American Depositary Receipt (ADR) and the individual shares are referred to as ADSs.

Depending on the level of compliance with U.S. securities regulations the foreign company wishes to follow, the company may either list its shares over-the-counter (OTC) with low reporting requirements or on a major exchange like the NYSE or Nasdaq. Listings on the latter exchanges generally require the same level of reporting as domestic companies, and also require adherence to GAAP accounting rules.

Foreign companies that choose to offer shares on U.S. exchanges gain the advantage of a wider investor base, which can also lower costs of future capital. For U.S. investors, ADSs offer the opportunity to invest in foreign companies without dealing with currency conversions and other cross-border administrative hoops.

Even though ADSs represent real claims to foreign shares (and could be converted if the investor wished to do so), there is currency risk involved in holding them. Fluctuations in the currency exchange rate between the USD and the foreign currency will affect the price of shares as well as any income payments, which must be converted into U.S. dollars.


Investment dictionary. . 2012.

Игры ⚽ Нужна курсовая?

Look at other dictionaries:

  • American Depositary Share — An American Depositary Share ( ADS ) is a vehicle for foreign corporations to list their ordinary equity on an American stock exchange, such as the New York Stock Exchange or the NASDAQ. Foreign corporations listed in other markets are not… …   Wikipedia

  • American Depositary Share — ( ADS) Foreign stock issued in the US and registered in the ADR system. Bloomberg Financial Dictionary * * * American depositary share American depositary share , American depository share ➔ Share * * * American Depositary Share UK US noun [C] …   Financial and business terms

  • American Depositary Receipt — Saltar a navegación, búsqueda ADR (sigla en inglés de American Depositary Receipt) es un título físico que respalda el depósito en un banco estadounidense de acciones de compañías cuyas sociedades fueron constituidas fuera de aquel país, de… …   Wikipedia Español

  • American Depositary Receipt — An American Depositary Receipt (or ADR) represents the ownership in the shares of a foreign company trading on US financial markets. The stock of many non US companies trades on US exchanges through the use of ADRs. ADRs enable US investors to… …   Wikipedia

  • American Depositary Receipt — ( ADR) certificates issued by a US depository bank, representing foreign shares held by the bank, usually by a branch or correspondent in the country of issue. One ADR may represent a portion of a foreign share, one share or a bundle of shares of …   Financial and business terms

  • American Depositary Receipt — Sigla en inglés de American Depositary Receipt. Es un título físico que respalda el depósito en un banco estadounidense de acciones de compañías cuyas sociedades fueron constituídas fuera de aquel país, de manera de poder transar las acciones de… …   Enciclopedia Universal

  • ADS — See: American Depositary Share * * * ADS ADS FINANCE abbreviation for American depositary share ➔ Share * * * ADS UK US noun [C] FINANCE, STOCK MARKET ► …   Financial and business terms

  • ADS — В Викисловаре есть статья «ads» ADS или Ads это: Реклама  сокращение от Advertisements. Active Denial System Система активного отбрасывания Active Directory Service  Служба каталогов Microsoft Windows, которая позволяет централизованно… …   Википедия

  • AdS — steht in Informationstechnik und Informatik für: Active Directory Service, eine Implementierung eines Verzeichnisdienstes von Microsoft Advantage Database Server, ein relationales Client Server Datenbanksystem Algorithmen und Datenstrukturen, ein …   Deutsch Wikipedia

  • Ads — steht in Informationstechnik und Informatik für: Active Directory Service, eine Implementierung eines Verzeichnisdienstes von Microsoft Advantage Database Server, ein relationales Client Server Datenbanksystem Algorithmen und Datenstrukturen, ein …   Deutsch Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”